We take a look at planning performance agreements and explain what are, how they work and their function.
What is a planning performance agreement?
In layman’s terms, a planning performance agreement (PPA) is typically an agreement that is made between a developer who applies for planning permission and the local planning authority. Usually, the local planning authority (LPA) is the local council.
A PPA, outlines how the planning application will be handled and what timescales will apply.
Why are PPAs used?
Planning law specifies how planning applications must be handled by LPAs. Planning law determines what a developer must do and how the planning authority or local council must respond. Furthermore, it lays down timescales. Essentially it sets the rules of engagement.
Although this system works for most types of planning applications it is not suitable for all. This is because larger and more complex developments which may need longer to process. A PPA enables an applicant and a local planning authority to agree to handle the application in a different way and to a different timescale.
Often a planning performance agreement may come about as a result of pre-application engagement and advice. During this consultation, it may be agreed that due to the complexity or technical issues a PPA may be the preferred route.
What are the benefits of PPAs?
In essence planning performance agreements provide flexibility. In theory both planning officers and developers are able to work collectively to find an agreement. Though this isn’t always the case.
The collaboration between both parties can iron out some of the smaller technical details instead of just rejecting applications and then asking a developer to re-apply. This saves time and money for all parties involved.
How does a it work?
A PPA is designed to create flexibility due to the complex nature of the application. Because of this, there are no predefined processes.
However there are some common traits.
- A planning performance agreement will need to be agreed upon before the submission of a planning application. These agreements can be used throughout the application process and also the post-application.
- PPAs are voluntary. Develops don’t have to use planning performance agreements and local councils don’t have to agree to their use. A PPA is deemed as a memorandum of understanding. Therefore it is not a binding legal contract.
- Probable. A local council will not grant a PPA if they believe that an application is likely to be unsuccessful.
- All invited parties need to sign. The principal parties to a PPA are the developer and planning authority or local council. Sometimes other parties are invited to join. This could include statutory consultees. Though everyone in attendance must sign.
- Planning Performance Agreement Charter. All parties are expected to comply with its rulings.
- There are three broad types of PPA. This is according to the Local Government Association. suggests there are three broad types of agreement: Type 1 (simple PPA), Type 2 (medium PPA), and Type 3 (comprehensive PPA).
- A PPA progresses in a standard way. But flexibility in terms of timing is extended.
- The LPA or local council still retains control. They are responsible for approving or rejecting the scheme.
- A PPA can be appealed. Similar to normal planning law.
When are PPAs used?
PPAs are typically used for large or complex applications. This includes large housing developments and large retail/commercial developments.
Planning performance agreements are often used where there are other considerations. For example, where a Supplementary Planning Document (SPD) is being developed, where a masterplan is being developed, or where there are many related projects/applications on the same site.
PPAs are often used where a planning application has strategic importance or which could prove controversial for some reason.
The National Planning Policy Framework (NPPF) 2021 for England & Wales (paragraph 46) advises that applicants and local planning authorities should consider the use of a PPA where such an application is likely to be simplified by this process.
Unfortunately each local council applies slightly different guidelines to determine whether a PPA could be used in a planning application.
Are PPAs conducive to gaining planning consent?
Simply put it improves the chances for success in more complex projects. This is because it gives a better opportunity for the details to be discussed to find common ground.
It should be stated though that the use of a PPA does not give the application preferential status.
What is a PPA likely to Cost?
There is no formal fee. However, the developer is often expected to make a payment to the local council or LPA to cover the time and resources that they will need to commit to the increased workload of a PPA. This is often beneficial to the developer as they are more likely to find common ground on a project as the local council is under less time pressure.
If you are an experienced property developer or even an investor in off-plan then you’ll be familiar with the processes involved in getting planning permission and the rules and regulations set out in the Town and Country Planning Act 1990.
The careful control of development activities allows the government and LPAs to ensure that any new property developments are carefully controlled and in keeping with their surroundings and in line with current planning laws. For larger developments, PPAs tend to be the most efficient way to progress an application.
For property development, obtaining the correct funding for projects will not only improve your bottom line but may also improve your application chances with the local council or LPA. This is because they want to ensure that the developer can get the job done without falling into funding problems. With this in mind, we recommend reading our article on development finance. It will detail how you can find the best deal for your development needs. We have also composed a list of frequently asked questions about how development finance works.
If you’re an investor contemplating investing in an off-plan project, we suggest reading our off-plan property guide. This will help you decide whether this asset class is right for your investment needs.