Search This Blog

Loading...

Wednesday, 30 November 2011

Autumn Statement – No Soft Soap (& Penfold)

Perhaps the Autumn Statement should have been called the Fall Statement – as in Decline and Fall, such were spirits dampened on a soggy day in London Town, and no doubt elsewhere too.

Not that we didn’t know what was coming.

Still, no point in wallowing in the misery of having to put off that free bus-pass orgy of celebration by yet another year, or dwelling too closely on the wisdom or otherwise of funding another bit of sub-prime madness, or remembering to factor in Euro meltdown. It’s all been well covered elsewhere.

So, for those with an interest in property development, I will just mention instead the document released by the Department of Business Innovation & Skills coinciding with the Autumn Statement called Implementing the Penfold Review, which has been welcomed by the British Property Federation.

As well as reforming the planning system through the NPPF and the Localism Act, the government wants to streamline the various other consent regimes that impact on development, which the Penfold Review found to be numerous and complex.

The government has therefore announced a further programme to:
·         Scrap unnecessary development consents and simplify others;
·         Reform the remits and working practices of the public bodies granting or advising on development consents;

·         Set a clear timescale for deciding development consent applications; and

·         Make it easier to apply for development consents.

The aim is to reduce costs and bureaucracy.

You can see the detail in the document.

The listed building regime gets particular attention.

Developers must apply for Listed Building Consent if they wish to undertake works that would impact on the special historic or architectural interest of a listed building. There are currently 375,000 listed buildings in England, which makes this is one of the most regularly applied for development consents.

To reduce the number of unnecessary applications, the government is to enable the extent of a listed building’s special interest to be legally defined in its list entry – so only those parts of a building that contribute to its special interest are protected by regulation, removing the requirement to apply for a consent for works that affect other parts of the building.

The government is also proposing to fast track consent for certain types of work to listed buildings, in view of the fact that 9 out of 10 listed building applications are approved.

So, no problem sprucing up the Victorian workhouses then.

Other property related Autumn Statement news:

The government is to review the planning appeals process.

Two more enterprise zones will be set up.

Oh, and a £5bn infrastructure boost (which is good news for construction and engineering companies, whose stock has risen today) . But you knew about that already.

Monday, 28 November 2011

Heat Back On: RHI Starts Today for Non-Domestic Sector

The Renewable Heat Incentive (RHI) scheme starts today, 28 November 2011, for non-domestic systems.

The non-domestic sector includes the industrial and the commercial sector; the public sector; not-for-profit organisations and communities.

RHI applies for any eligible systems installed since 15 July 2009.

RHI offers guaranteed payments for the heat generated using certain low carbon technologies. It was originally supposed to launch for business applicants on 30 September 2011, but the government had to await State Aid approval from the European Commission before it could start. I posted about the scheme a few months ago, when some observers were sceptical about whether it would happen at all.

On 10 November 2011 OFGEM issued two volumes of guidance: Volume one “Eligibility and how to apply”; and Volume 2 “Ongoing obligations and payment"

There is more information generally on the OFGEM website.

The technologies eligible for support under the RHI are solid and gaseous biomass boilers; solar thermal; ground and water source heat-pumps; on-site bio-gas; deep geothermal; energy from waste combustion and injection of biomethane into the grid. Combined heat and power will be eligible where the fuel or technology is from that list.

Air heat-pumps; direct air heating and bioliquids are not eligible under RHI and the scheme excludes co-firing of biomass with fossil fuel; exhaust air heat pumps; transpired solar thermal panels; fossil fuel fired CHP and waste heat from fossil fuel.

OFGEM will administer the scheme and be responsible for responding to applications for support, accreditation, making payments and ensuring compliance with the conditions and obligations.

Participants will receive ongoing quarterly periodic support payments from the date of installation for a maximum of 20 years. The payments will be calculated according to heat generated by applying a tariff.

In return for the RHI payments, owners of eligible installations will be expected to allow the monitoring of the installations via heat metering and inspections to ensure compliance with RHI Regulations, and to perform ongoing maintenance.

Many people are concerned that the scheme is overly bureaucratic and that the metering requirements could be prohibitively expensive for smaller sites.

The heat produced must be used for an “eligible purpose”; it must be useful and useable and meet a genuine existing or new economically justifiable heating requirement.  The installation must attach to special meters to ensure the accurate capture and reporting of information. Participants must keep records and regularly report data to OFGEM and maintain installations and meters to certain standards, all of which is explained in detail in the guidance and there is also a useful set of FAQs on the OFGEM website.

The domestic sector will be eligible for support from RHI at some point in the future, but no date has yet been set.

Wednesday, 23 November 2011

Government’s Green Deal & BPF’s New Deal

The government has today unveiled its £14bn Green Deal scheme.

DECC has launched a consultation which will last until 18 January 2012.

They want to hear, in particular, from those organisations with an interest in operating within the framework and members of the general public, including those who might be considering investing in energy efficiency.

The government claims the scheme will be supporting at least 65,000 insulation and construction jobs by 2015, which is good news although considerably scaled down from the 250,000 Green Deal jobs being promised by Chris Huhne this time last year.

My recent post, Green Deal - One Year to Go, gives a brief summary of the scheme.

As an incentive, the government has announced up to £150 cash back would be available for homes taking part in the scheme.

However, no incentives have yet been announced for businesses.

Meanwhile, ahead of the Chancellor’s Autumn Statement next Tuesday, the British Property Federation (BPF) has pitched in with a 5-point plan aimed at harnessing the expertise of the property industry to promote growth and investment in the UK economy through a series of zero and low-cost measures that it says would free the property industry to go for growth.

Recent data shows the commercial property industry employs more than 800,000 people, is larger than the banking industry and is worth £46 billion to UK GDP or 3.5% of the UK’s GVA.

The 5 points the BPF wants addressing are:

1.    Tax Increment Financing (TIF) – BPF wants this brought forward from 2013 to deliver badly-needed infrastructure and unlock development. I did a post about TIF recently here.

2.    Empty Property Rates – the BPF has been campaigning for the abolition of these rates. At a time when shop vacancies are at an all time high, struggling businesses and retailers are being doubly punished by a tax on empty, unproductive property.

3.    Reit reform – the BPF wants further changes to help widen the investor base in property, and particularly to encourage institutions such as pension funds to invest in new housing. The BPF also supports the creation of mortgage reits, something that could help banks to deal with their overhang of property debt, and for the requirement for reits to be listed on a stock exchange to be relaxed.

4.    The assault on tax relief for capital expenditure should be suspended at a time when it’s important to encourage business to invest.

5.    Simplification or a more coherent climate change policy framework that is more sensitive to the challenges of tenanted commercial property. I’d specifically mention the CRC Energy Efficiency Scheme in this context.

And finally...in the Guardian today Simon Jenkins gives the government’s new housing initiative (which I mentioned here) what is technically known as a monstering, saying only builders will profit from Cameron’s plan to “use up to £650m of public money to reflate what is by definition the sub-prime end of the mortgage market.”

Using public money to back mortgages, he says, sends out a toxic message. The cash should be used on housing for the poor.

“Sub-prime was an error more grotesque in its consequence than any could have foreseen. No responsible government should head that way again.”

It’ll probably all go away quietly once the headlines have served their purpose.

Betting the House

Housing has been dominating the headlines over the last few days with the launch of the government’s new housing initiative.

There are some jaw-dropping statistics flying around.

For instance, the average age of a first time buyer in England is currently 37. In London it’s 43.

With banks demanding on average a deposit of 20%, home ownership for many people is no longer a realistic goal.

The government wants to help by setting up a mortgage indemnity scheme for new builds.

Here’s how it works.

Borrowers will have access to mortgages of up to 95 per cent loan to value on new build homes from participating builders. So buyers will put down their 5%. The bank lends the remaining 95%, but the government and housebuilders will guarantee nine of those percentage points. The housebuilders take on 3.5% of the risk by putting the equivalent in cash into an indemnity fund, so the government is guaranteeing the other 5.5%. That means the bank can offer a 95% mortgage to the punter, but only be at risk on an 86% loan to value.

Merryn Somerset Webb on Money Week thinks the government is mad to spend £400m on the housing market.

“Is a subsidised and manipulated housing market a “healthy market?” Or is it a market riddled with conflict and moral hazard? One in which would-be first-time-buyers are being lured by a desperate government surrounded by housebuilding lobbyists into taking on loans the market has already told them they can’t afford? Strip this indemnity scheme back to its basics and you will see that it is no more than a form of the securitisation that got us into all this trouble in the first place. The buyer holds the worst strip – the first 5% of losses via their deposit. But we the taxpayers hold the second most toxic strip – the 5.5% we are guaranteeing for the banks. The government will be working its numbers based on the idea that defaults will knock around the long-term average of 1-2%. But if interest rates go from 0.5% to even 2% (let alone the 8 or 9% they would be in any normal times with inflation at 5%), unemployment keeps rising, and recession returns, that won’t happen. The buyers - if any can be found - will end up in negative equity. The taxpayer will be hit up for millions (this is no different to the subprime securitisation).”

The government press release is at pains to point out:

“Builders will take the first loss in the indemnity, with Government only being called upon to pay once the builder's fund has been exhausted.”

Perhaps that leaves the taxpayer with the third, rather than the second, most toxic strip.

And it’s only new builds, not the whole housing market.

It still smacks of desperation though.

Still on housing, the British Property Federation has told a committee of MPs, the CLG Select Committee that the only solution to the UK’s housing crisis is to encourage institutional investors, such as pension funds, to build-to-let.

The BPF says that institutional investors are already interested in housing and coupled with today’s political support and increased demand for rental properties, they could help meet the UK’s housing need.

The BPF also argues for a release of public sector land, most of which is held by local authorities, to help solve the issue of scale.

For renting to become an acceptable and civilised alternative to home ownership, and a stable way of life, I would argue there are also questions of affordability and, in the private sector, security of tenure for tenants that also need to be addressed.

Institutional investors, in it for the long term, might offer more chance of resolving those difficult issues than amateur landlords.

And finally....perhaps we need some good old fashioned Victorian philanthropy of the kind examined by Ian Hislop on When Bankers Were Good, shown on BBC2 last night. If you missed it, it's well worth catching on the iplayer. Driven by religious zeal, the likes of Samuel Gurney and George Peabody gave away vast sums, the latter founding the great Peabody Estates in London. 

Tuesday, 22 November 2011

Litigants in Person: DIY Law (and Lease Mergers)

I’m enjoying Garrows Law, currently in its third season and being broadcast by the BBC on Sunday evenings.

For anyone with a passing interest in the development of the English legal system it makes interesting viewing. I particularly like the judge exhorting the jury to “get on with it” after about 10 seconds of deliberation on a capital offence; a deliberation which takes place in a courtroom huddle in full view of everyone (like they’re organising a whip-round rather than a hanging).

I’ve no idea how accurate it is (not very, according to Professor JR Spencer of the University of Cambridge), but like m’learned friend Charon QC, I’m not that bothered either. Sunday evening is better spent hoovering up the dregs from lunchtime than fretting over historical accuracy.

We don’t hang people for petty theft or causing criminal damage any more (at least not at the time of writing), but it seems we are at a tipping point so far as access to justice is concerned. Legal aid in criminal cases is really only available now to those on benefits. In civil cases, we face the prospect of thousands more people having to represent themselves in court once civil legal aid has, like most of the defendants in Garrow’s day, bitten the dust.

These are the so-called litigants-in-person.

The implications of the dwindling availability of professional representation in court are considered in a very well- written piece by Adam Wagner on the UK Human Rights blog.

Adam discusses the major new report issued by the Civil Justice Council called Access to Justice for Litigants in Person (or self-represented litigants). It is a major and ambitious attempt to make the justice system fairer and simpler for people who go to court without a lawyer, although as Adam concludes, it’s a moot point whether there will be the will or the money to carry out the transformation that the justice system really needs.

For the DIY lawyer, the labyrinthine, and often positively Kafkaesque, procedural complexities of our court system are bewildering and well nigh impossible to navigate. It often takes up a great deal of court’s time trying to help them through the legal maze.

Information about the law can also be hard to get hold of, notwithstanding the vast amount that can now be discovered on the internet. As Adam points out, at the moment, online information for litigants is split between the Directgov website (which is not very user friendly and often seems inadequate), the court services and the Ministry of Justice. There are also the websites of the other government departments and the excellent Bailii for reported cases, but the latter is a charity dependent on the benevolence of others to keep it going (and long may it continue). The sources of information on the internet are generally very fragmented.

Even so, sometimes the little guy can beat the system.

This talk of litigants-in-person reminded me of a property law case a few years ago where a litigant-in-person not only won his case in court – and the Court of Appeal at that - but also caused the Land Registry to have to rewrite one of its practice guides as a result.

In Wall v Collins [2007] EWCA Civ 444 Mr Wall claimed he had a right of way along the passageway beside his house in Bolton. The Land Registry told him it had ceased to exist, but Mr Wall, representing himself, was having none of it.

When a leaseholder buys the freehold, the lease “merges” into the freehold, which usually means it disappears. This case concerned the question of what happens to rights that were granted by a lease after that lease has merged with the freehold.

It’s a highly technical issue, but one that was pursued by Mr Wall with a tenacity and refusal to be defeated often found in litigants-in-person.

Established legal thinking at the time was that when a lease merges with the freehold, any easements or covenants attached to the leasehold interest are extinguished. It had therefore become common practice in some instances to provide that the lease did not merge when the freehold was acquired in order to ensure that the benefit of the rights would not be lost. This was a bit cumbersome however because it left a lease in place that nobody really wanted.

Mr Wall’s lease had already merged, so he could not take advantage of this practice. Mr Wall instead argued, and the Court of Appeal agreed, that the practice was unnecessary. The court decided that when a tenant has an easement, the easement relates to the property, but not to any particular interest in that property.

The easement exists in its own right, it has a life of its own, and can remain even after the lease that created it has ceased to exist, although only for the remainder of the term for which it was originally granted.

All of which might sound a bit existential. However, what it meant for Mr Wall was that he could continue to use a passageway by virtue of an easement that had been granted by a lease as long ago as 1910 (which was merged with the freehold in 1999), and as the term of that lease was 999 years, Mr Wall had a right of way that would outlive him, the life of his house, and in all probability western civilisation itself.

That was one in the eye for the legal establishment, as well as the Land Registry who, rather embarrassingly for them, had to write an addendum to Practice Guide 26 on lease determination, correcting their error. It’s now referred to in paragraph 4.4 of the current Practice Guide 26. Note that the Land Registry won’t automatically note these rights on the registered title; you have to ask them to do so when the lease is merged.

What if the rights only last for a short time, say 5 years? That’s not much use to a freeholder.

The Court decided, in Wall v Collins, that the right could be converted into a permanent right under section 62 of the Law of property Act 1925, which says that a conveyance or transfer of land is deemed to include all easements and rights used with the land. Short term rights can be converted into permanent freehold rights in this way. However, a word of warning, section 62 is often disapplied as a matter of course in modern conveyancing precedents. If you are a tenant buying your freehold, you might therefore want to delete any exclusion of section 62.

Oh dear. I’ve managed to meander from a discussion on fundamental rights concerning access to justice to a conveyancing technicality. Mea culpa (which for younger readers is Latin for “my bad”).

Mr Wall was clearly up to the task.

Many people facing more serious blights on their lives, left to drown in the rising tide of ever more new law, might not be so skilled or even so lucky.

Wednesday, 16 November 2011

Community Infrastructure Levy: Is the Price of Planning About to Go Through the Roof?

The Community Infrastructure Levy (CIL) is on the way and its impact needs to be considered now.

That is the message from Nabarro in this useful guide to CIL.

CIL is a new development tax payable in respect of development authorised by planning permission in England and Wales. It is set out the Planning Act 2008 and CIL Regulations 2010, but its implementation is dependent on the planning authority for the particular area adopting a CIL charging schedule setting out rates payable for increases in floor space.

I wrote a brief introduction to CIL in Don’t Forget the Price Tag. The Nabarro piece contains more detail on how the charging system will work and on the consultation currently under way, which is looking at whether CIL can be put towards affordable housing, also mentioned in my post.

Why is this relevant now?

According to Nabarro, two local authorities (Shropshire County Council and Newark and Sherwood District Council) will already have charging schedules in force on 1 January 2012 and other local authorities are following closely behind.

In London, the Mayor’s CIL proposals will be examined in public by an Inspector on Monday 28 November 2011. The Mayor intends that CIL will be payable on most new development in London from April 2012 with the aim of raising £300m for the delivery of Crossrail. London boroughs and the Mayor will both be charging authorities entitled to charge CIL, which could prove expensive.

CIL rates, once set, will be index linked.

CIL is the new price of planning.

Will it go through the roof?

Tuesday, 15 November 2011

Boundaries – Presumptions and Myths

Land often sits alongside physical features such as rivers or streams; lakes or the seashore.

Or there may be man-made physical boundaries, often dating back centuries, such as hedges, roads, canals and fences.

Who owns these features and boundaries? Who is responsible for them?

Often old title deeds or the modern computerised title registers won’t say anything about them. Or the title plans will be drawn to a scale which is too small to be of any use when trying to find out who owns, say, a fence. The thickness of a line on a standard Land Registry plan represents about 3 feet (nearly a metre) on the ground.

Into this void step various “presumptions” which have been established down the years and one or two myths as well. These conventions have a complex history, but here is a brief summary of some of the main presumptions which apply if the deeds cannot assist.

Rivers and streams (non-tidal)

The owner of a property that abuts (sits alongside) a natural non-tidal river or stream (known as the “riparian” owner) also owns the bed of the river up to the centre line and if the course of the river or stream changes naturally, the boundary is presumed to change with it. You can’t cheat though and alter the course of the river yourself to land grab; changes made as a result of human agency do not alter the line of the boundary. The boundary will also not change if the watercourse changes quickly, for example after heavy rain. Ownership of the bed will usually also entitle you to fish, unless fishery rights have been granted to someone else. Here is a useful guide from the Environment Agency which explains the more general obligations of riparian owners, for example with regard to pollution.

Islands

An island in the middle of a non-tidal river will belong equally to adjoining owners or in such proportion as the centre line of the stream bisects the island. An island entirely on one side of the river will belong to the near-side owner. An island in the sea or a tidal river will belong to the Crown.

Canals

If your land borders a canal, the canal and towpath are excluded from your ownership.

Lakes

The bed of a lake belongs to the owner of the surrounding land if the lake is entirely within the boundaries of a single ownership. If the lake is not within the boundaries of a single ownership, there is no presumption that explains who owns the lake bed.

Seashore and tidal rivers

The boundary of land which adjoins the sea lies at the top of the “foreshore”, which is the land between the high and low water mark of a mean average tide. The foreshore itself is owned by the Crown. The same applies to land bordering tidal rivers and inlets. For more about Crown ownership see the Crown Estate website.

Roads

The boundary of land abutting a highway extends to the middle of the highway, so this is similar to the presumption for rivers. However, the ownership of the road will be subject to whatever rights the highway authority has over it.

Railways

Railways were built on land acquired for that purpose, so the boundary of adjoining land is not the centre of the track but the bounding fence of the railway. The bounding fences are generally the responsibility of the railway company.

Hedges and ditches

When properties are separated by a hedge and an adjoining single ditch there is a presumption that the land owner on the hedge side owns both the hedge and the ditch. This follows a principle that an owner standing on his boundary looking inward towards his land dug his drainage ditch within his boundary and piled up the soil on his own side and then planted a hedge on the mound. This only applies to man-made ditches and does not apply if at the time the ditch was dug the land on either side was owned by the same person.

Fences

People often say that if the upright posts supporting the fence are on your side of the boundary then you own the fence. However, strictly speaking there is no presumption at law regarding ownership of a fence, although the position of the posts may be taken into account by a court in helping to determine the ownership of the fence.

Eaves and foundations

Plans attached to deeds usually show the boundaries at ground level only, but the eaves and foundations may in fact extend beyond the defined boundary line. If that is the case, the property includes these projections (but not the air space between them), unless there is evidence to the contrary.

Party Walls

Walls shared between two houses, such as in terraced or semi-detached housing, are usually party walls unless there is clear evidence that the wall is wholly to one side of the boundary line. I won’t go into the law concerning party walls here as that could take up several blogposts in itself.

Remember that all these presumptions can be rebutted – set aside – by evidence to the contrary or if the title deeds actually say something different.

If you intend carrying out any work to boundary features it is always a good idea to discuss them first with your neighbour and try to reach agreement. Boundary disputes are usually a nightmare for all concerned.

And finally...

Bricked-up Windows

Nothing to do with boundaries, but this week’s QI came up with a bit of myth-busting about bricked-up windows. The common assumption is that they were bricked-up to avoid or reduce window tax, which was charged between the 1690s and 1851. Sometimes that may be true, but more often they were just incorporated into the design of a building from the outset, to preserve the building’s symmetry. Minus 20 points if you got that one wrong!


Thursday, 10 November 2011

CRC Energy Efficiency Scheme: Who’s Top of The League?

The Environment Agency this week issued a new Performance League Table ranking 2,000 organisations according to how they manage their energy use under the CRC Energy Efficiency Scheme (CRC).

The table includes major supermarkets, retailers, restaurant chains, hospitals, professional firms, government departments and local authorities.

The scheme requires large organisations that use more than 6,000MWh electricity per year to measure and report carbon emissions. They gain credits for installing smart meters and complying with Carbon Trust - or an equivalent accreditation scheme - standards of energy management.

More information about how the table is compiled is on the Environment Agency’s website.

The good news is that 60% of CRC organisations have taken steps to improve their energy management.

Business Green reports a spokeswoman for the Department of Energy and Climate Change (DECC) congratulated those organisations performing well.

"It's clearly a difficult time for British business, but it's encouraging that so many companies realise energy efficiency can help cut their bills and improve their bottom line.”

DECC, no doubt to the relief of all concerned (apart from satirists), sits joint top of the table with 21 other organisations, including law firm Slaughter & May (the policy of working through the night by candlelight with the heating turned off and compulsory string vest wearing clearly paying dividends there), Centre Parks, and...clears throat...British American Tobacco.

Manchester United (curses!) even manage to get to the top of this league too, in the guise of Red Football Limited.

The Department for International Development is the only other government department getting a top score.

However, that leaves 40% in the metaphorical relegation zone, having failed to score a single point.

Business Green quotes James Ramsey, head of Carbon Clear:

"This is the first time UK companies have been forced to disclose publicly their carbon data, and the results are really quite extraordinary. The fact that more than 40 per cent – including many big brand names – failed to score a single point is a clear indicator that they are not even monitoring their energy data."

David Symons, director at consultancy WSP Environment & Energy, warned that the 800 lowest-ranked organisations were wasting money.

"If all the 800 companies at the bottom of the league table [installed the simplest of automatic meter readers], they would together cut UK carbon emissions by 100,000 tonnes, cut £12m off their energy bills and avoid having to buy £1.2m of CRC allowances."

And, as the Guardian notes, the league table does not disclose those organisations that failed compliance with the legislation altogether, and now face fines starting from £45,000.

There have been many criticisms of the table for example it doesn’t compare like with like.

The league table has also been criticised for being over-bureaucratic and this week the British Retail Consortium (BRC) called for it to be scrapped - its director of business, Tom Ironside, is quoted by Greenwise saying:
"The league table produced as part of the Carbon Reduction Commitment is just pointless duplication. Instead of being able to focus on developing environmentally friendly business approaches, retailers are being forced to spend time and resources on extra bureaucracy. This flies in the face of the government’s commitment to reducing red tape."

None of the major retailers was at the top of the league, although Asda, Morrisons Supermarkets, Home Retail Group, John Lewis Partnership, Marks and Spencer and Tesco all made it into the top 100. 

However, highlighting performance in this way seems likely to encourage the concept of carbon reduction and energy saving to be taken more seriously.

The next time the league table is published, organisations will be under even more scrutiny as to whether they have moved up or down the table.

Photo by bpariedle via Flickr

Tuesday, 8 November 2011

Growth out of Austerity: Will TIF Help Foot the Bill?

Tax Increment Financing (TIF) is an investment tool for financing infrastructure and other related development that has been successfully employed in North America for 40 years.

After two years of intensive lobbying by the British Property Federation (BPF) alongside the Core Cities Group and others, the government finally announced in autumn 2010 that TIF will be introduced in England. The Scottish Executive has already approved Scotland’s first scheme and is considering a number of others.

How does TIF work?

In short, the UK TIF model is based on reinvesting a proportion of future business rates from an area back into infrastructure and related development.

TIF might therefore offer a solution for regeneration projects which depend on the delivery of a piece of infrastructure for which funding cannot be found from other, public or private, sources.

TIF allows more upfront money to be raised by committing incremental business rates – that is revenues which would not have arisen but for the project going ahead – to be used to repay that initial investment.

For more about how TIF works, see this Rough Guide produced by the BPF and the Core Cities Group.

Although it’s not the answer to everything, its supporters see TIF as being a useful way of allowing some schemes which have stalled to go ahead.

Public funds have dried up and the private sector is mired in uncertainty, even if in some cases it does have the cash.

The Communities and Local Government Select Committee published a report last week warning that ministers have no adequate strategy to address the complex problems faced by England's most deprived communities. If further resources for regeneration are not found, there is a risk that major problems will be stored up for the future.

Launching the report the Chairman, Clive Betts MP said:

“The Government's measures will not attract sufficient investment for renewal into those communities where the market has failed. There is no sign that the private sector is filling the gap as public resources are being withdrawn. Indeed private investment is only likely to be attracted in partnership with public funding. Without further investment targeted at those places most in need, Ministers will store up serious social, economic and environmental problems for the future.”

The report calls for a national regeneration strategy that specifically targets the country’s most disadvantaged communities.

Paragraphs 83 to 88 of the report deal with TIF. The Committee received mixed responses on the contribution TIF could make to regeneration in today’s market, but generally speaking the Committee supports the availability of TIF in certain circumstances, as part of the funding mix.

The retail sector, on the other hand, is arguing strongly for private sector-led TIF.

The British Council of Shopping Centres (BCSC) is advocating a developer-led TIF – a Local Tax Re-Investment Programme (LTRIP) - to allow the private sector to lead economic growth, and potentially unlock up to 50m sq ft of stalled retail schemes in the UK.

BCSC is challenging the government’s interpretation of public accounting rules that developer-led TIF schemes have to be classified as government borrowing because they relate to a government income stream – business rates.

BCSC argues that, as LTRIP transfers the risk entirely to the developer, if the additional business rate income is not realised or the costs of construction exceed projections, there is no reason for any debt to appear on the public balance sheet.

You need to be careful with risk though, as a glance at some of the outcomes of the private finance initiative will reveal.

You can see why developers like the idea of this. After all, what’s not to like, from their perspective?

Where TIF applies, the business rate income would take the place of the money developers are usually required to contribute to infrastructure through planning obligations.

Regeneration is one thing, but do we really need more shopping centres?

It’s not like anyone’s got any money to spend in the ones we have already. And where will the tenants come from?

One of the comments made to the Select Committee was that in terms of regeneration, large shopping centres may even make things worse for deprived communities who see their local shops decline.


“It is important not to consider Tax Increment Financing as the answer to all regeneration problems. It relies on an increase in business rates revenue and accordingly may not be successful in some of the most deprived areas. Nevertheless, it offers the potential to raise finance for regeneration in certain circumstances, and should be available to local partners alongside other tools. We agree that the best time to implement TIF would be as the economy emerges from recession. We look forward to its introduction at the earliest opportunity and to seeing how the Government's proposals work out in practice.”

The BPF, whose twitter stream alerted me to this topic in the first place, is meanwhile calling for rapid TIF use and has welcomed the Select Committee’s report.

Friday, 4 November 2011

Squatting: The New Crime

The government has published its response – options for dealing with squatting - to its consultation on squatting law which ended on 5 October.

It has also published an equality impact assessment.

Following consideration of a total of 2,217 responses to the consultation, the government has confirmed that it intends to criminalise squatting in residential properties.

The justice secretary, Kenneth Clarke, last week introduced a late amendment (NC26) to the Legal Aid, Sentencing and Punishment of Offenders Bill, and there were demonstrations against this in Parliament Square earlier this week.

The proposed amendment would create a new offence of trespass to a residential building where the person is living or intends to live there. “Residential” is defined as “designed or adapted, before the time of entry, for use as a place to live” and “building” includes a temporary or moveable structure. The offence would not be committed by anyone holding over at the end of a lease or licence.

A person convicted of the offence would be liable on summary conviction to imprisonment for a maximum term of 51 weeks (up from the current 6 months for breach of the Criminal Law Act 1977 provisions) or a fine of up to £5,000.

Here is a link to my previous posts on squatting for more background. In short it is currently criminal offence for anyone who goes on to residential premises and remains as a trespasser to fail to leave those premises on being required to do so by a displaced residential occupier (a homeowner) or protected intending occupier (someone intending to move into the property).

In his introduction to the response, Crispin Blunt points out that there are many residential property owners, including landlords, local authorities and second home owners, who cannot be classified as “displaced residential occupiers” or “protected intending occupiers”.

He also comments that there are also many commercial property owners, whose businesses may seriously be affected by squatters.

However, no change is being proposed yet to the current position relating to commercial property, where owners have to obtain a court order before they can evict squatters, although as the new offence is described as a “first step”, it will be seen by many as the thin end of the wedge, whereas it is regarded by the government as a “balanced compromise”.

Blunt says:

“Squatters who occupy genuinely abandoned or dilapidated non-residential buildings will not be committing the new offence, although their actions will rightly continue to be treated as a civil wrong and they can still be prosecuted for offences such as criminal damage or burglary.”

The government response notes that the British Property Federation wanted the new offence to cover all buildings, a sentiment echoed by a number of law firms representing commercial clients.

One firm indicated their clients were frustrated with the limited powers of the police to deal with these cases, “particularly in relation to commercial premises where criminal damage is alleged”.

One commercial organisation who responded, the Ballymore Group, said:

“On every occasion we have had to go via the legal route. This requires our solicitors to apply to the courts for an application to evict the squatters. This usually takes between 4–8 weeks (during which time raves/squat parties take place). Our properties are always subject to criminal damage which in turn costs us/insurers in excess of £1m to date.”

But criminal damage is already a crime, so isn’t the problem here one of enforcement?

The government intends to continue to explore whether the enforcement of existing criminal offences (such as criminal damage and burglary) and civil procedures that enable owners to regain possession of their properties can be improved. 

Interestingly, at the sharp end, the Metropolitan Police, responding on behalf of the Association of Chief Police Officers, considered the law was broadly in the right place and that the existing array of offences allowed them to tackle the worst cases of squatting, although they could see that there might be a case for widening existing offences to ensure that residential properties which are not currently under occupation are protected by any new offence, for example homes under renovation or second properties. In contrast, the CPS supported the new offence, considering that the current law provided inadequate protection to home owners who were not intent on immediate occupation of their property but who had not abandoned the property.

The Criminal Bar Association and the Law Society opposed the creation of a new offence.

I particularly like the comment from the Magistrates Association, who were also reluctant to see the law changed and were particularly concerned that any new law did not result in hikers, scouts or guides or schoolchildren on an orienteering trip taking shelter in a derelict outbuilding in the mountains or fells being prosecuted for squatting!

The Land Registry recognised that a new offence of squatting covering all buildings may have an impact on the law of adverse possession. They thought that one effect of a new offence of squatting in empty buildings would be to prevent squatters acquiring ownership through their long-term possession They queried whether the offence should extend only to “buildings, or parts of buildings, where it ought to be apparent that they are still occupied by the owner, and not to those buildings, or parts of buildings that appear to have been abandoned.”

The principal problem does not seem to be so much the law itself, but the way it is being enforced, or rather not enforced, and the perceived ambiguities in the law – as evident from the responses to Question 19 of the consultation. Those ambiguities have not exactly been helped by a series of misleading comments made by ministers on the issue.

The role of the police needs to be clarified.

Will the proposed introduction of a new crime address this issue, beyond making it easier for residential property owners to report the crime without having to make conversation with the squatters first?

The Metropolitan Police have acknowledged that more training is necessary.

The responses to the consultation make interesting reading and reveal how complex an issue this is. The government’s mind was already made up though.

Time will tell whether the introduction of the new offence will actually address these issues or turn out to be simply playing to the gallery.

Photo by qnr via Flickr

Thursday, 3 November 2011

St Paul’s Protests - City Option to Stay?

It appears the protesters outside St Paul’s Cathedral in London may have been granted a temporary reprieve.

The Guardian reports that the City of London Corporation has told the Occupy London protesters it is happy for them to stay in the lee of St Paul's Cathedral until the New Year.

The City is staying tight lipped for now though about precisely what it is willing to offer.

Representatives of the City met protesters yesterday in the Guildhall, with two lawyers attending for the corporation and Paul Ridge of law firm Bindmans representing Occupy London.

In its tweets about the negotiations, the City said it was a "constructive meeting" where the Corporation people "outlined City's responsibilities re highway and planning".  

The City also tweeted:

“Our aim is agreement (without prejudice) re reducing camp size and limiting duration. Reps taking this back to general assembly. More Fri.”

Both the Cathedral and the City have suspended any legal action to evict the protesters.


“Our objective is to ensure the highway is cleared and this issue is resolved peacefully. The church has changed its position with regards to a camp being on its land, which means that we have had to rethink as well. So we have pressed the pause button so that discussions can take place with protesters and others on how we can resolve the problem we face as a local authority - namely camping on the public highway.”

Given the complexity of the land ownership, which I mentioned yesterday in my post Whose Land is it Anyway?  it is difficult for either the City or the Church to act unilaterally.

Perhaps this is why the City is now focussing on its role as highway authority rather than land owner – a role which distinguishes it from the position held by the Church.


Wednesday, 2 November 2011

St Paul’s Protests – Whose Land is it Anyway?

The Church of England is one of the biggest landowning institutions in the country.

But it does not appear to own all the land immediately outside St Paul’s Cathedral, where Occupy London have set up camp.

This report in the Church Times quotes the now-departed Dean Knowles saying the Cathedral Chapter has “no control over the grounds” sur­rounding the cathedral and that the “ownership of land around St Paul’s is not a clear issue” because there was a “combination of owner­ship” between the Cathedral and the City of London Corporation

To find out precisely who owns what and where the boundaries lie, one would have to do a search of the public index map held by the Land Registry, assuming the land is indeed registered.

In any event, this complexity of ownership may turn out to be an advantage to the protesters who may yet be faced with legal action.

Alex Aldridge writes in the Guardian that the key figures amongst the lawyers who have offered their services free of charge to Occupy London are Paul Ridge, a partner at the London civil liberties law firm Bindmans, and John Cooper QC, a barrister specialising in criminal law at 25 Bedford Row.

“Ridge, a UCL-educated veteran of a string of high-profile human rights cases, reckons the protesters not only have a strong moral argument but an interesting legal one. "British courts have long recognised the right to gather and assemble in public," he says. "At the same time, there are legal intricacies around this case because the land surrounding St Paul's is not under single ownership, meaning the relevant landowners would need to act together."”

The Cathedral and the City suspended legal action, but such a stay is likely to be temporary, and Aldridge comments:

“If and when court action gets under way, expect a slick legal campaign, funded by the City of London's vast resources and drawing upon its array of top legal contacts.”

Nevertheless, the legal process could still drag on for months. It took around three months before an eviction order was issued against the late Brian Haw, in the case involving the removal of the ant-war protester from Parliament Square Gardens.

I walked past the protest camp for the first time today, and was struck by how well organised it appeared to be; with a daily schedule of talks, seminars and films at its “Tent City University” and an array of interesting artwork and thoughtful campaigning amongst the more obvious sloganeering.

It seems to have quickly become a tourist attraction.

Above all the camp seemed peaceful and at ease with itself, apart from a somewhat worse-for-wear character lurching from side to side with a tin of Guinness Extra at 11am – probably an investment banker giving careful consideration to the implications of the Greek referendum.

The latest reports are that this afternoon representatives from Occupy London were due to start meeting those from the Corporation of London at the Guildhall, the home of the Corporation, at 3pm.

Paul Ridge, who is attending, said:

 "The protesters have always made it clear that they want dialogue and they look forward to seeing what the City of London have to say. They are going with open minds."

Whatever happens ultimately, I hope this does not end badly for all concerned.