Category

Real Estate & Construction
•April 16, 2020•

A SITE AT THE END OF THE TUNNEL?

A SITE AT THE END OF THE TUNNEL?

COULD NEW PROCEDURES CLEAR THE WAY FOR THE CONSTRUCTION INDUSTRY TO GET BACK TO WORK?

Author: Mark Summers

A flurry of announcements around the UK’s construction sector in recent days will give the industry hope that a sustainable return to work against the backdrop of the coronavirus pandemic will soon be possible.

Many in the sector will reflect that this clarity on their operations is long overdue, and comes after a period of what one of the industry’s main mouthpieces has called “significant confusion”.

The announcement by the UK government on 15 April that construction work can “truly begin” on the high-profile HS2 rail-link comes just days after Spain allowed construction sites to re-open as part of the first set of measures easing its nationwide lockdown.

On the same day contractors were being told they could put shovels in the ground on HS2, the Construction Leadership Council (CLC) published the latest version of its Site Operating Procedures (SOP) – a set of guidelines designed to let construction firms ensure a safe operating environment for their workers in light of the continued spread of the COVID-19 virus.

Procedures for safe working

The new guidance sets out further detail including the fact that firms are expected to actively monitor their employees’ compliance with government advice; that workers with no option but to share transport with colleagues should travel in the same group of individuals and with the windows open where possible; and that where workers cannot work and maintain a 2-metre distance from each other, measures should be taken to mitigate the effects of this.

The latest advice builds previous on SOP guidance issued by the CLC and taken together contractors now have a set of procedures governing everything from lifts (“stairs should be used in preference”) to lunch (“workers should be encouraged to bring their own food… and avoid using local shops”).

Constructing confusion

Contractors may now see a route back to work on key sites after a difficult few weeks.

Construction was not included on the initial list of industries which the UK government specified would have to close as COVID-19 began to make its malign presence felt across the economy. However, the government’s general edict that employees should travel only to carry “essential” work, together with concerns among workers themselves about the safety of their sites, ultimately saw many projects shuttered in any event.

For a time at the start of the lockdown period was hard to discern agreement within the cabinet, let alone beyond it, on what action construction workers should take – Health Secretary Matt Hancock said workers who could not work from home should go to work to “keep the country running”, while Michael Gove indicated only construction workers engaged in work “critical to the economy” should go in.

Before long Housing Minister Robert Jenrick clarified that work in people’s homes was permitted if it could be carried out safely – but former cabinet ministers such as Iain Duncan Smith were still calling for only construction workers engaged on “emergency requirements” to be at work. 

The CLC noted in a statement that there was “significant confusion at the moment, given that different things have been said by different people, and this is very unhelpful”. However, the industry body itself acknowledged that it did little to help when it subsequently issued a version of the SOP guidelines which stated that work should not be carried out unless workers could distance themselves from each other by two metres at all times. The advice was withdrawn just hours later after stakeholders across the industry pointed out that in practice such a rule would close nearly every site in the country. Add in geographical inconsistencies – Scotland has taken a harder line on what constitutes permitted construction work than elsewhere – and it has been a deeply challenging environment for the construction sector to navigate.

A path back to work?

Public Health England (PHE) has included advice specific to the construction industry in its guidelines on how to successfully implement social distancing in the workplace. Crucially, the sector is told that staff are to keep 2 metres apart “as much as possible”.

Other examples of best practice set out by PHE include the following:

  • Workers should avoid skin-to-skin and face-to-face contact;
  • Groups of workers should be kept together in teams as small as possible and the mixing of team members should be avoided;
  • Staff should wash their hands each time before getting into “enclosed machinery” (such as diggers) and every time they get out.

The CLC’s latest procedures include further detail, which effectively calls for each contractor to undertake a detailed review of their operating practices, to include everything from entry and egress to their sites, staggering working hours to ease the burden on public transport and adding hand-washing facilities across sites.

The above represents an increased regulatory – and likely financial – burden for contractors, but most will reflect that this pales into insignificance of the pressures likely to accrue due to any prolonged stoppage of work.

Counting the cost

If the various stakeholders in the UK construction industry have found it difficult to find common ground in recent weeks, there is one thing on which all parties can agree – the cost to the industry of the Coronavirus pandemic is already huge, and will increase precipitously if sites remain shuttered in the coming weeks and months.

One key bellwether, the IHS Markit purchasing manager’s index for UK construction, has already shown a fall to its lowest level since April 2009 – and the Chartered Institute of Procurement and Supply has noted that the virus has already caused the closure of construction sites and redundancies for builders “on a frightening scale”.

Often even the largest contractors don’t have a large bank of tangible assets on which they can secure further lending, with many critically reliant on the monthly income from their various projects.

Little wonder many are keen to seize any opportunity to get back to work – or continue to make every possible effort to avoid halting work altogether.

“Remobilising sites is expensive, as is mothballing them, which is why so many businesses want to continue operating but with lower productivity to ensure social distancing,” the chief executive of the National Federation of Builders has noted.

It remains to be seen if the industry’s major players consider the conditions right to get back to work – contractors rely on their subcontractors and supply chain, and many smaller firms have taken the decision to sit things out until the crisis abates. Not to mention the fact that any return to work will be reliant on gaining the confidence of construction workers that modified working conditions are sufficient to safeguard their health.

But the symbolic step taken by the government to allow work to proceed on HS2, coupled with a more detailed set of procedures on site safety is likely to make the construction sector among the first to return to work when the lockdown is eased.

With 2.4 million employees, and a 6 per cent share of the UK’s total economic output, it’s in everyone’s interests that this happens as soon as it can.

For more information or advice please contact our Construction Team.

•March 27, 2020•

Welsh Government Guidance for LPA

Welsh Government Guidance for LPA

The effect of Covid-19 has resulted in many places of work having to adapt their style of working almost instantaneously. On the 27 March 2020, the Welsh Government (“WG”) released guidance to Local Planning Authorities relating to their planning service delivery and changes in procedure.

The key points may be summarised as follows:

Pre- application

WG are considering temporary amendments to the Town and Country Planning (Development Management Procedure) (Wales) Order 2012 (“DMPWO”). Such amendments will include the removal of the need for site notices and making information available for inspection at a location in the vicinity of the proposed development. Whilst this is being considered, WG are encouraging developers to make use of online services when engaging with local communities.

Processing of applications

  • COVID-19 – All COVID-19 related applications are to be prioritised as a matter of urgency. WG have considered site visits for COVID-19 applications as ‘essential trips’, although any application unrelated to COVID-19 will not require a site visit. Satellite imagery and google street view is encouraged to be used as an alternative where possible.
  • Validation – WG encourage all applications to be made online via Planning Applications Wales as the portal continues to function as normal. All online applications are to be validated in order to identify applications in accordance with priority.
  • Timescales – The determination timescales in the DMPWO will not be altered, although consideration for the temporary removal of provision in legislation, to refund the planning application fee has been made. WG are encouraging developers to agree to extensions of time, but the ability to appeal to the Welsh Ministers on the grounds of non-determination will still be permitted.

Decision making

Due to planning committees being cancelled, WG are considering how local authorities can continue to operate. The amendment of bespoke aspects of planning committees will be reviewed, and regulations are likely to come forward in light of the Coronavirus Act 2020 and its powers.

Planning Policy

The National Development Framework is due to proceed to the next stage of the statutory preparation process. WG have advised that this process is likely to be delayed due to the prioritisation of urgent matters.

Technical Advice Notes have undergone changes which

came into force on 26 March. TAN 1 has been removed, and amendments to Planning Policy Wales have been made. TAN 11 and TAN 15 are currently being reviewed, and any consultation required will continue post COVID-19.

Appeals

WG have advised that the Planning Inspectorate aims to process all appeals as ordinarily as possible. In order to assist, the Planning Inspectorate would be appreciative if you could inform them of your arrangements for planning committees to meet and delegated decision made with regard to the determination of planning applications and the issuing of enforcement notices.

We are here to help

For more information on any of the points raised, or if you would like us to offer advice on any concern you may have please contact Steve Morris in our real estate team.

•March 24, 2020•

Coronavirus – An Unwelcome Visitor to the High Street

Coronavirus – An Unwelcome Visitor to the High Street

Key contact: Damien Cann

Author: Cerith Bevan

Businesses operating in the retail sector have temporarily lost their high street presence following the Government’s announcement on Monday 23 March 2020 that all but essential business should remain closed until further notice. Landlords will also feel the pinch as they see a fall in demand from new tenants waiting for the wave to pass and requests for rent holidays from existing tenants.

Can tenants just walk away?

Probably not.  Retail tenants may seek to argue that their lease has become frustrated due to the outbreak of COVID-19 being an event which renders it commercially or physically impossible to fulfil the lease obligations.  However, courts impose a very high bar when dealing with the argument for frustration of a lease and would be unlikely accept that the effect of the COVID-19 outbreak amounts to frustration. We saw in 2019 how the courts rejected the European Medicines Agency’s argument that Brexit had caused their lease to become frustrated.

What about rent?

Leases require the premises to have suffered damage for rent to be suspended which is not an effect of COVID-19.  On 23 March 2020 the Government ordered a moratorium for at least three months on lease forfeiture for occupiers, meaning that landlords will not be able to exercise any right of forfeiture on tenants unable to pay rent. This provides struggling retailers with some breathing space during these difficult times with most required to make a quarterly rent payment on 25 March. Kate Nicholls, Chief Executive of UK Hospitality has said ‘whilst this removes the immediate cashflow pressure of quarter rent day, the Government has made clear that the negotiation is now with the lessee and landlord to reach a solution on payment.’

Retailers may also seek to engage in a Company Voluntary Arrangement (CVA) to reduce its rental liability under leases.  We have already seen the use of CVAs amongst retailers which has caused some unrest among landlords (primarily due to the lack of say they have in the process). In particular, the high court decided in 2019 that implementation of a CVA (and the resultant reduction in rent being paid by the tenant) does not trigger a ground for forfeiture in leases. This decision inevitably means landlords’ hands are tied when it comes to its forfeiture rights when a CVA is engaged.

From a practical perspective, many landlords are receptive to the idea of agreeing a deferral or rent-free period during this period of uncertainty – the rationale being that it’s better to help keep a tenant afloat by agreeing a lower rent than contributing to its demise by enforcing a rent which it cannot pay.

Insurance

Both landlords and tenants should check their business interruption policies.  Whilst most of these types of policies relate to interruption following property damage, there are policies which cover the event of disruption as a result of a ‘notifiable disease’ – the Government have already declared COVID-19 as a notifiable disease.  In terms of retail tenants, this type of insurance can cover lost profits, fixed costs (such as rents) and increased costs of working.

Preventative measures and associated costs – who pays?

In trying to contain the virus, landlords may look to carry out frequent deep cleaning of common parts – this may even become a legal requirement in time.  The likelihood is that the tenant will bear these additional costs by paying a higher service charge pursuant to the provisions in the lease.  The extent to which the landlord can recover these via service charge will likely depend on whether the costs are reasonably and properly incurred and in line with the principles of good estate management.

Survival of the fittest

As we have already seen during our series of articles on the future of the high street, the retail market is in a huge period of transition resulting in the decline of traditional high street. Even the strongest remaining businesses will require substantial and continued support from Government to pass this unprecedented test.

We are here to help

Whether you are a landlord or a tenant, we can assist your business in dealing with these testing times.  Please get in touch with us if you would like us to offer advice or enter into negotiations with landlords or tenants on your behalf.

For more information on any of the points raised, please contact Damien Cann or our real estate team.

•March 5, 2020•

Business rates – the death of the high street?

Business rates – the death of the high street?

Time for a change?

Business rates are outdated and place an unfair burden on bricks-and-mortar shops, contributing to the decline of the high street. Reform is needed and this formed a key part of the December 2019 Queen’s Speech which promised a full review of the business rates system.

Business rates are calculated based on the property’s ‘rateable value’ – an estimate of the open market rental value of the property which is then multiplied by a set multiplier (approximately 50%).

In October 2019, the House of Commons Treasury Committee’s report on the impact of business rates on businesses revealed that the current valuation regime can lead to problems, with reports that one company’s business rate valuation was calculated at £17,000 more than its actual rent outgoings. There is little transparency on how the rates are calculated which is then compounded by the difficulty in appealing possibly unfair business rates.  Rateable values are set for five years, which creates an unresponsive and rigid system.

The effect of business rates on the financial strength of high street chains should not be underestimated, particularly when compared to exclusively digital companies. It was reported that House of Fraser’s £4.6m business rates bill for its then flagship store on Oxford Street was the same as Amazon’s total corporation tax bill in the UK for 2017.

Last month, 52 retailers including Asda, B&Q, Greggs and Ann Summers, wrote to the former Chancellor Sajid Javid calling for an overhaul of the business rates regime.

Options for reform

Temporary fixes such as the retail discount relief in England and the High Street and Retail Rates Relief in Wales are in place for this financial year. The Queen’s Speech in December 2019 also promised legislation to change valuations to a three yearly cycle and to increase the retail discount. More radical change is required, each of the following solutions have gained some support:

  • Land Value Tax – shifting the tax from the property to the underlying land, making the landowners the taxpayer rather than the tenants, providing relief to businesses in areas with overall lower property values and encouraging investment in the high street. There is an obvious risk that the additional tax would be passed onto tenants in any event.
  • Profits based tax – with the benefit of being easier to calculate than the current business rate system (similar to the way in which corporation tax is charged). However, avoidance by profit reductions or shifting could make collecting tax difficult and certain non-profit organisations (such as schools and hospitals) who currently contribute substantial business rates would be exempt
  • Single consolidated tax – a model suggested by the Centre for Policy studies, who have proposed combining business rates, together with VAT, corporation tax and employer’s national insurance, under one tax system aimed at businesses with a turnover under £1 million. The transformation of the tax system required is unlikely to receive sufficient political support.
  • Digital Sales Tax (DST) – seemingly the government’s preferred option. 

DST

“Be absolutely crystal clear: the web has killed the high street.”

Mike Ashley’s explosive view during his evidence to the High Street and Town Centres Committee in December 2018 warned that the tax disparity between online businesses and traditional bricks-and-mortar shops is contributing to the significant decline of the high street.  With the proportion of goods bought online rising to about a fifth of all sales, updating UK’s tax system to reflect this new retail environment seems a self-evident obvious solution.

This reform may be implemented through digital services tax, charging a rate of 2% on UK revenues of digital businesses and may come into force in April 2020. DST aims to level the playing field for digital businesses and those on the high street, adding a burden to online business crudely matching high street overheads and rent. Tax will not apply indiscriminately to every online business, but only to those who undertake certain online activities. It is also worth noting that businesses will only become liable where they fall within one of these activities and:

  • as a group it generates more than £500 million in global annual revenues; and
  • as a group it generates more than £25 million in annual revenues linked to the participation of UK users (the first £25 million of UK taxable revenues is untaxed).

These thresholds will protect the vast majority of businesses with an online only presence. The tax is really aimed at international companies with huge revenues such as Amazon or Google. 

DST has been met with a critical response from industry insiders – Tom Ironside of the British Retail Consortium has questioned how the tax “is really going to resolve the challenges we currently face.” Doug Gurr, Amazon’s UK Manager also points out that if such a tax is introduced Amazon will pass the increased costs onto their sellers, which could have a harmful effect on smaller independent business who use Amazon to sell and make up the majority of their sales.

The idea of a tax on digital sales and services is not a new concept with other nations implementing similar measures. The European Commission proposed a directive for an interim digital tax as a short-term solution for Member States until reform of a wider scale is implemented. This has been introduced in France, where a tax of 3% applies retrospectively from 1 January 2019 on the gross revenues of digital activities where French users are considered to create significant value.  Implementation of a similar scheme in the UK has prompted adverse comment from the US Treasury secretary who has threatened retaliatory tariffs if US business interests are prejudiced.

Prediction

There is a danger that DST will do more to damage the UK’s global relationships during the Brexit transition period than boost high street retail.  The web has killed many traditional retailers’ high street businesses with the burden of business rates accelerating that demise.  Those that have survived need to continually innovate to offer their customers an experience that cannot be delivered online.

•December 17, 2019•

Construction Contract Chaos – Supplier Delivery Notes and Terms

Construction Contract Chaos – Supplier Delivery Notes and Terms

It is a common running theme within the construction industry that when parties are embroiled in a dispute, there generally tends to be a dispute about whose terms apply. This not only applies to the Employer/Contractor and/or Sub-Contractor relationship, but it is also becoming predominantly common in disputes involving the supply of products for any construction works.

The construction industry is notoriously known for contract chaos where the parties exchange a number of conflicting terms prior to any works being performed by the parties.

Suppliers to construction contracts frequently argue that their delivery notes containing their own terms would govern the contractual relationship with a Contractor. This has become a common argument adopted by suppliers within the construction industry. This always has a Contractor up in arms. It does appear extremely unfair for a supplier to argue that a delivery note accepting goods and containing terms signed by an employee with no contractual background or involvement, would allow the supplier’s contractual terms to apply between the parties.

Universal Sealants (UK) Ltd (t/a USL Bridgecare) v Sanders Plant and Waste Management

The recent case of Universal Sealants (UK) Ltd v Sanders Plant and Waste Management highlighted the importance of understanding what contractual terms exchanged prior to the performance of any works applied. The case had to deal with a number of construction related determinations. However, for the purpose of this article, we will solely concentrate on the supplier delivery element of the dispute.

The case involved a contract for the supply and delivery of concrete to the Claimant for works carried out at Bladon Haugh Viaduct on the A1 in Gateshead. The Claimants had specified a specific grade of concrete (M5) to the supplier but had instead been supplied with an inferior grade concrete (ST5).

The Claimants had telephoned the supplier on 21 February 2017 stating they required delivery and installation of M5 concrete and argued that a representative of the supplier confirmed that the supplier would be able to provide and pour the specified concrete. For completeness it should be mentioned that the supplier’s representative maintained that she had told the Claimants the strongest grade of concrete that could be supplied was ST5.

A subsequent email was sent to the supplier’s containing a sub-contract for an order of M5 concrete. The sub-contract contained a link to the Claimant’s standard terms. The concrete was delivered to site on 07 March 2017. It was the Claimant’s case that the initial telephone call was an invitation to treat whilst their subcontract was the offer to purchase M5 grade concrete. The offer was accepted by the supplier’s conduct in delivering the concrete to site irrespective whether it was M5 or ST5 grade concrete.

It was founded that the terms of the contract were those attached to the subcontract order emailed by the claimant. This amounted to the offer to purchase the concrete which the supplier accepted when they delivered the goods to the site. The delivery note incorporating the supplier’s standard terms had not amounted to a counteroffer as it was only signed after the concrete had been poured by which time the contract had already been performed.

Mrs Justice Jefford determined that the order was accepted by the delivery of the concrete to the site. There was then a concluded contract on the terms of that order. The production of the delivery note on dissimilar contract terms was not effective. It was too late to be a counteroffer.

Observations for clients

As we all know, construction sites are busy and high-pressured environments. It would sometimes be difficult for a site employee to read everything on a delivery note. Suppliers commonly argue that their delivery note terms apply.

Whilst the above case does appear helpful, Contractors may be minded to advise their site employees and employees who may collect goods/materials for site from a material branch that when signing for deliveries, they note that they are simply signing for a delivery of the goods and they are not and cannot sign an agreement to any new contractual terms. This should assist a Contractor if they are ever in a dispute of a similar nature. Contractual disputes can be messy and expensive. In order to protect the position as far as possible, Contractors should maintain throughout any correspondence or communications received relating to any delivery what terms apply and confirm any refusal to accept any other terms exchanged.

For more information on this topic please contact our litigation team.

•November 28, 2019•

The Future of the High Street

The Future of the High Street

For many, a stroll down their local high street has become a dispiriting experience. The latest research from the Local Data Company and PwC does nothing to improve the mood with 16 shops closing every day on average.

The problems affecting the high street are numerous:

  • People want choice, ease and value for money, which is something easily provided by the online marketplace and not always provided by high streets.
  • Changing habits are also a factor, people no longer want to go out just to shop, they are now looking for “destinations” and experiences. Many retailers are not changing their offerings quickly enough to attract these consumers.
  • Fragmented ownership of many small high streets where several Landlords are competing against each other and not working together or with local councils to attract tenants or improve the offering in their area.
  • The unfairness of the business rates system – the Government’s review found that the retail sector accounts for 5% of GDP but pays 25% of the business rates bill.
  • Planning rules and lease clauses can restrict the use of buildings and how they are occupied, which can restrict how the sector can innovate to meet consumer’s expectations.
  • Business failure results in increased vacancy rates causing the high street to feel unloved and uninviting depressing trade and resulting in further closures.

What can be done to save the high street?

  • TACKLING THE PROBLEMS – in order to adapt the high street to keep up with the changing demands of the public, planning policy has a role to play by ensuring that existing and prospective high street occupiers do not have to satisfy restrictive and archaic regulations.  Mike Ashley proposed that retailers who make more than 20% of their sales online should be subject to an ‘online retail tax’ of 20% on online sales.
  • CREATING A WIDER APPEAL – for the high street to remain important for most towns and cities, it will need repurposing in order create an environment which appeals to a diverse audience – a place where people can eat, live, shop and have fun evolving from simply being a place to shop.
  • Encourage a MORE COLLABORATIVE RELATIONSHIP BETWEEN LANDLORD AND TENANT. This should be more of a partnership, as both parties make an investment in the success of the retailers’ venture. There are inevitable constraints or issues which may have an impact on this, such as how the Landlord funded their initial investment, but where possible a collaborative approach should be fostered.
  • LOOKING AT LEASES – the House of Commons’ report on ‘High Streets and Town Centres in 2030’ encourages landlords to provide ‘their tenants with good quality properties on a flexible basis and investing in and reconfiguring properties for new uses’. Several specific measures were put across including the removal of the traditional ‘upward only’ rent review, which have been banned in Ireland since 2010

These are just some of the ways we can stop tumbleweeds blowing down our local high streets by turning them back into bustling local communities.  We will explore these ideas in greater detail in forthcoming articles

For more information on any of the points raised, please contact Damien Cann in our real estate team.

•September 9, 2019••

Building the future – Can Wales overcome its sluggish housebuilding record?

Building the future – Can Wales overcome its sluggish housebuilding record?

At these times of stark political differences, the need for Britain to build more homes is one of the few things the country's major parties are agreed upon.

"We have not built enough homes in this country for generations," the Conservative Party lamented in its manifesto for the 2017 election.

Labour struck a similar note in its proposals, asserting: "Britain has a housing crisis – a crisis of supply and a crisis of affordability."

Meanwhile, the Liberal Democrats noted the "…far-reaching consequences of a shortage of decent housing on economic growth, labour market mobility, education, and social mobility…"

But if there is a rare political consensus on the need to build more homes, the best means of adding to Britain's existing housing stock is subject to more typical political point-scoring.

In such a febrile atmosphere, a dispassionate view of the challenges and obstacles to delivering more homes is invaluable – and a recent forum hosted by planning and development consultancy Lichfields in Cardiff allowed real estate professionals just such an opportunity.

If anything, the firm's experts said, the crisis in housing is even more pronounced in Wales – noting that there has been a "stark difference" in the strength of recovery of the housebuilding sector in Wales following the 2007-2008 financial crisis when compared to neighbouring England.

While England has staged a full recovery and the latest figures show the annual number of completed new homes has returned to 99.5 per cent of pre-recession levels, that figure for Wales remains stubbornly lower at just 66 per cent.

Lichfields was at pains to note that the reasons for this discrepancy, and for the sluggish pace of delivery of new homes in Wales generally, were "complex", taking in everything from planning policy to workforce skill levels.

Fortunately, industry leaders were told, Wales – and the country's South Wales economic heartland in particular – currently has a perhaps unprecedented range of policy levers with which to revolutionise its approach to housebuilding.

The Welsh Government has commenced work on a Strategic Development Plan (SDP) which it is hoped will give a coherence to land supply and housebuilding across a number of the country's local authorities which has previously been missing.

Additionally, the £1.2 billion City Deal for Cardiff promises sizeable investment into public infrastructure including a new South Wales Metro which it is hoped will help to create 25,000 new jobs and unlock the economic potential of deprived areas on the periphery of the capital.

Little wonder Vicky Robinson, Vale of Glamorgan Council's operational manager for planning and building control told the Cardiff audience that across South Wales there are "quite a lot of busy policy teams at the moment".

Key to the success of what may emerge from the region's planners will be avoiding previous pitfalls – what Lichfields' Gareth Williams described succinctly as "making sure the next round of plans are perhaps more effective than the last lot of plans".

At the start of 2019, the Welsh Government released its estimates for the country's housing need over the next 20 years. Their research estimates that Wales will have to deliver 8,294 homes per year for the next five years. 

The ambition of that target becomes all the more clear when figures show that Wales has delivered an average of 6,000 homes per year for the last decade.

The latest central estimates will inform the development of the SDP – but Stephanie Irvine, senior planner at Lichfields, cautioned against adhering too closely to these figures.

She told delegates: "The Welsh government has stated that these estimates shouldn't be applied as targets – but we have got no assurance that they won't be. So the question is – do these estimates provide an appropriate basis for the housing future or are they simply reflections of what happened in the past?"

Her concern is that estimates are often based on data from a particular period – such as the sluggish years of growth immediately following the financial crisis – which can then be a bad fit when circumstances subsequently evolve. Not only this, but the devil is in the detail when it comes to the methodology of such forecasts.

"A young couple living with their parents will only be included [in the data] as a concealed household if that house is overcrowded. So unless they are sleeping on the sofa, that won't count as a concealed household," she explained.

If planners stick rigidly to the latest estimates of housing need from the Welsh Government, she added, by 2038 there could be an increase of 113,000 people aged 65-plus and a reduction of almost 23,000 people aged 16 to 64 – the key workforce demographic.

"This would be completely out of step with the aspirations of the City Deal," she added.

In order to deliver on the promise of a renewed commitment to housebuilding by Wales' various stakeholders, the Lichfields senior planner believes flexibility will be key – with an increased role for direct public funding of affordable housing augmented by a more welcoming environment for commercial development, and an increase in the contributions to the public purse the Section 106 agreements for such schemes would provide.

"There is a need for aspiration, and to move away from these past trends if we want different outcomes in future," she said. 

•May 21, 2019••

Commissioning a new approach

Commissioning a new approach

A comprehensive report by the Law Commission is expected to result in a shake-up of planning in Wales

The Law Commission has a plan for planning in Wales.

It recently published a comprehensive report recommending a new planning code for the country.

It highlights the shortfalls of a Welsh planning system which shows signs of a distinctive national planning policy but on the other is still bewilderingly complex in parts. Since 2000 there have been six Acts of Parliament and four Acts of the Assembly. It is often not clear whether the growing number of provisions made by the Assembly in Cardiff and Parliament in Westminster apply to Wales only, to England only, or to both England and Wales, the Commission has noted.  Practitioners who operate in both jurisdictions will be only too aware of this confusion.

High time, then, to consolidate these diverse provisions into a single, simple and easy to navigate planning act, which the Commission hopes will be passed this Assembly term.

A willingness to listen

The Commission received more than 160 formal written submissions to its request for feedback, and it admits these ranged from parties who were of the “if it isn’t broken, don’t fix it” mind-set to those more enthused by the idea of greater codification of planning law. The latter, more proactive, group made up the “greater majority” of the responses to the Commission’s consultation, it says.

The finished report touches on a broad range of planning concerns that touch all aspects of the built environment in Wales – from prosaic procedural matters to be taken into account when embarking on routine, domestic development to steps designed to safeguard listed buildings and forests.

Easy does it

A consistent theme in the report is the Commission’s willingness to defer to the opinions of those stakeholders currently most active in Welsh planning, so as not impose top-down wide-ranging reform without buy-in from the sector. Some very wide impact suggestions – for example the abolition of outline planning permission and listed building consent – have not made the cut (in the former case due amongst other concerns to a perceived negative impact in investor confidence).

However, even if such reforms don’t take their place immediately in any new Wales planning code, their presence in the raft of proposals initially made by the Commission may act as a signpost to future reforms.

A vision for the future

While not all proposals have therefore been taken forward, those that did will certainly still shake-up the sector, with 193 recommendations having now put forward to the country’s lawmakers.  Some of the key suggested reforms are as follows:

  • Amendments to the definition of “Development” to widen its scope and create clarity, with the corresponding permitted users diverted to an extension to the GPDO
  • Abolition of enterprise zones and simplified planning zones
  • That the procedures for applying for certificates of lawful development be included alongside those relating to planning permission rather than linked to enforcement (in effect this was the case prior to 1991)
  • New ability for a developer to apply for a certificate that all pre-commencement conditions have been complied with but coupled with a deeming provision that in the event of a commencement in breach, the rest of the permission would in any event be deemed to be granted so that the other conditions may subsist and be enforceable
  • Section 73 of the Town and County Planning Act 1990 amended to apply to any amendment to a planning permission, not just to conditions
  • Merger of conservation area consent with planning permission such that demolition would only require planning permission
  • Reinstatement of specific provisions to enable planning authorities in Wales to deal with graffiti and fly-posting
  • Removal of several archaic definitions including dwelling houses and curtilage and replacement with modern terms
  • Simplifying the law on High Court challenges.

The Welsh Government is due to provide its interim response to the report in May 2019 – with a detailed response expected by the end of the year. These proposals, if adopted, will provide a welcome simplification of the current system for practitioners and the increased efficiency can only be a benefit for development in Wales in a post-Brexit era.

If you would like any further information in connection with this article, please contact Steve Morris in our real estate team.

•March 29, 2019•

Acuity Law wins prestigious award for third successive year

Acuity Law wins prestigious award for third successive year

Key Contacts: Gareth Baker, Steve Morris

Leading commercial law firm Acuity Law has won the award for property law firm of the year for an unprecedented three years in succession at Insider’s Wales Property Awards.

Having scooped the accolade in 2017 and 2016, the Cardiff, Swansea and London based firm was recognised for the big impact it has made on the property industry in Wales again this year.

The prestigious event celebrates key movers in the property and construction sectors in Wales. The firm was praised by judges for its innovation and work on big deals.

Partner Jonathan Geen and head of real estate at Acuity Law said: “These are exciting times in Welsh property and construction. This year we’ve been involved in major capital projects and funding strategies for regeneration, infrastructure and housing, with some landmark deals signed, developments completed and more flagship schemes in the pipeline.”

“This award cements our national reputation for the strength and depth of our expertise, and reflects the hard work and commitment of everyone in our real estate and construction teams. We’re thrilled with the recognition for our role in pioneering projects designed to safeguard the future prosperity of our communities.”

At this year’s awards ceremony, held at Cardiff City Hall and compered by television presenter Mark Durden-Smith, Wales Business Insider editor Douglas Friedli said he hopes 2018 will be the year that “Cardiff’s success goes viral, sparking enterprise, regeneration and development across the country”.

•March 15, 2019••

Acuity wins Law Firm of the Year 2019

Acuity wins Law Firm of the Year 2019

Acuity Legal were at the iconic Guildhall in London yesterday evening (6 February) to receive its award for Law Firm of the Year (Wales) at The Legal 500 Awards 2019.

Designed to recognise and reward the cream of the UK’s legal profession, the awards are presented to elite legal practitioners based on the in-depth research into the UK legal market conducted by The Legal 500.

The prestigious award follows the news that two of Acuity’s elite partners have been selected for The Legal 500 Hall of Fame, which highlights individuals who have received constant praise by their clients for continued excellence. Jonathan Geen and Paul Lowe have both reached this milestone as worthy individuals at the pinnacle of their profession.

At the exclusive networking reception for the winners, managing partner Rachelle Sellek said: “We’re absolutely thrilled to have won Law Firm of the Year in the Wales category. This is a hugely exciting time in the firm’s growth and development, so this win marks a significant milestone for our business, with our clients and our people at the heart of it.”

Acuity has doubled in size in recent years and last year advised on over 100 UK-based transactions with an aggregate value of over £1.5 billion. Rated by the independent legal directories as a top tier firm for corporate transactions and commercial property work, its real estate team was named property law firm of the year by Insider in June 2018 for an unprecedented three years in succession, and its corporate team scooped the coveted title of legal team of the year in September 2018.

 

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