Black Country Core Strategy Issue and Option Report

(1) 5. Delivering Growth – Infrastructure and Viability

(1) Introduction and scope

5.1 This Part of the Report considers what infrastructure will be required to support both existing needs, and the growth set out in Part 3.

5.2 So that communities, industries and commercial activity across the Black Country can be vibrant, accessible and healthy they need to be well-served by a range of supporting infrastructure including schools, affordable housing, transport networks, shops, open spaces, recreational and community facilities and support from health and emergency services. Modern high quality commercial developments also require the support of a range of infrastructure to be sustainable and attractive, including motorway and public transport access, flood water management, waste management and disposal, utilities (water supply and waste water management, electricity and gas) and communications infrastructure (including 5G).

5.3 The current Core Strategy seeks to meet development needs up to 2026 within the existing urban area. The evidence and the consultations undertaken for that plan indicated that the urban regeneration strategy made the best use of existing infrastructure and that in broad terms sufficient infrastructure existed or could be provided to help deliver the strategy. The Infrastructure Delivery Study (2009) and the Delivery and Implementation Plan (2010) were produced as part of the 2011 adopted Strategy and were described by the Inspectors who examined the Core Strategy as “both detailed and comprehensive” (IR para. 7) and the Inspectors concluded that they considered “there are reasonable prospects of delivering the necessary majority, if not all, of the new infrastructure identified, including public and other transport improvements, before 2026” (IR para. 8)

5.4 The growth in development required across the Black Country up to 2036 will place pressure on existing physical, social and green infrastructure, and measures need to be in place to ensure that new growth is supported by appropriate and timely infrastructure provision so that vibrant and sustainable communities can be created and maintained. This will also create opportunities to provide infrastructure solutions to ease and remedy existing issues.

5.5 The NPPF states that local planning authorities should work with other authorities and providers to assess the quality and capacity of infrastructure, and its ability to meet forecast demand. Core Strategy Policy DEL1 Infrastructure Provision requires all new development to be supported by the necessary on and off-site infrastructure to serve the development, mitigate its impacts on the environment, and ensure that the development is sustainable and contributes to the proper planning of the wider area. In line with this Policy, the specific infrastructure requirements for developments up to 2026 have been set out in Local Plan documents adopted for each local authority, in the context of local needs and availability of funding.

5.6 In addition to identifying more land within the urban area for future growth, this review will consider the need to release areas on the urban fringe for development, including potentially large Sustainable Urban Extensions (SUEs). These areas may have more limited access to the range of infrastructure needed to create sustainable development. Some of this infrastructure, such as flood water management, utilities and communications, may be relatively easy and viable to provide. However, infrastructure which requires significant up-front investment, such as new roads, or on-going service provision, such as schools, public transport and community services, may be more challenging to provide.

(1) Social Infrastructure

5.7 New housing may in some locations create a need to expand health, educational and other community services. As options for the location of major new housing allocations develop through the review process, so will decisions about the need for any such facilities and their locations. The NPPF recognises the importance of positive planning for inclusive communities and states that local plans should provide for shared spaces for people to meet and for facilities that communities need, as well as safeguarding against the unnecessary loss of valued facilities and services. It also promotes an integrated approach to considering the location of community, leisure and other facilities together with housing.

5.8 New housing will create additional demand for school places and health services. At the same time, changes in the existing population structure and the way that services are delivered mean that alterations may need to be made to the types and locations of facilities. Education establishments, outdoor recreational facilities (such as playing fields and golf courses) and cemeteries need large areas of land on which to operate and expand – and in the Black Country many of these facilities are located on the urban fringe.

5.9 There is a rich and diverse network of public open spaces areas, formal parks, canals and outdoor recreational areas such as playing fields and nature reserves throughout the Black Country urban area, which extends out into the urban fringe. This network contributes to the health and wellbeing of Black Country residents by helping to encourage physical exercise and sustainable transport. Improvements to this network to serve urban fringe developments could benefit the existing urban area.

5.10 The Midlands Engine Strategy recognises that the Midlands is a powerful engine for national economic growth and includes a range of initiatives to create more jobs, grow productivity and help close the skills gap with the rest of the country. New development across the Black Country has a role to play in achieving these aims through the provision of local employment and training opportunities during both construction and end use phases. Core Strategy Policy EMP5 ‘Improving Access to the Labour Market’ aims to capture this aspect of social infrastructure resulting from new development.

(3) Physical Infrastructure

5.11 Physical Infrastructure is defined as transportation and utility provision including water, energy and telecommunications.

5.12 The transport network in the Black Country is very well connected to the rest of the UK and provides a reasonably good level of service. A significant network of local roads connects the settlements throughout the Black Country. In terms of public transport the rail network includes four passenger rail lines and the Midland Metro light rail system that operates between Birmingham and Wolverhampton, whilst a comprehensive bus network operates throughout the Black Country. The existing Core Strategy identifies a comprehensive package of transportation infrastructure requirements set out in Policy TRAN1. These projects are still appropriate but additional infrastructure will be required to support the higher levels of growth required and to serve new development locations.

5.13 The Black Country has a comprehensive network of Public Rights of Way which are both a recreational resource and an important provider of links to other forms of transport. In addition there are on road cycle routes including those on the National Cycle Network.

5.14 An outline Water Cycle Study (WCS) for the Black Country was undertaken to support the Core Strategy which concluded that the water supply was satisfactory and did not identify any major issues with sewage and water treatment capacity. The water companies also did not identify a need for new waste water treatment infrastructure during the preparation of the Core Strategy. Engagement will be needed between the Black Country authorities, the Environment Agency and water providers to ascertain if there are any issues with the supply and treatment of water that would impact on the ability to deliver any further housing or employment growth.

5.15 Any further housing and employment developments will need to be connected to gas and electricity services. Whilst historically there have not been issues with the provision of such utilities, particularly industrial uses may require infrastructure improvements to the electricity network in the long term in certain areas.

5.16 The NPPF notes that advanced, high quality communications infrastructure is essential for sustainable economic growth. The development of high speed broadband technology (5G) and other communications networks also plays a vital role in enhancing the provision of local community facilities and services and can be a factor in attracting industries that make use of this technology. It can also lead to changes in working patterns and reduce the need to travel, for example by enabling home working. However, other than the provision of masts to support mobile communications, and encouraging “passive provision” in new developments in the form of trunking to carry fibre optic cables, the role of the planning system in facilitating high speed telecommunications is limited. There are no known limitations affecting the capacity of the communications network in the Black Country.

5.17 As part of work undertaken for the UK Renewable Energy Strategy (2009) and Renewable Energy Action Plan for the UK (2010), the potential for the development of new renewable energy and combined heat and power (CHP) infrastructure in the West Midlands has been explored in a study carried out on behalf of the West Midlands local authorities, following the methodology recommended by the Department for Energy and Climate Change (DECC). The 2011 study ‘Renewable energy capacity study for the West Midlands’ suggests that in the Black Country there is relatively low capacity, largely comprised of microgeneration.

Delivery and Viability

5.18 The existing Core Strategy covers the period 2006-2026 and set ambitious regeneration targets. Achievement to date in meeting these targets is set out in Appendix C and summarised below.

5.19 Sufficient land has been allocated to meet the overall Core Strategy housing target and reasonable progress has been made on housing completions to date, despite the dampening effects of the recession. Many of the housing allocations are affected by delivery issues, including poor ground conditions, low market values and fragmented land ownership and some will need gap funding to ensure delivery by 2026.

5.20 The Core Strategy aimed to shrink the stock of Local Quality Employment Land through redevelopment of surplus land for housing. However, the employment land stock has proved to be more resilient than predicted and sites have proved difficult to bring forward for housing through Local Plans. Therefore, although there has been a loss of nearly 400 ha of Local Quality Employment Land, this is nearly 150 ha short of the target for 2016. The stock of Strategic High Quality Employment Land in the Black Country has not grown as much as planned, however quick progress in delivery of sites in South Staffordshire, including i54, and the emergence of new sites on the urban fringe have helped to balance this effect. The overall effect has been that total employment land has fallen to slightly less than the level expected by 2016 (3,335 ha compared to 3,392 ha).

5.21 The recession, internet and changing shopping patterns have meant that the anticipated delivery of 249,000 sqm of comparison shopping floorspace is not on course to being delivered with only 23,294 sqm being completed to date. Likewise, delivering offices in Strategic Centres, with a target of 220,000 sqm, was always ambitious and the completion of 28,244 sqm shows that delivery has been challenging. To maintain the vitality and viability of centres, the future functions will need to take into account the challenges and assess what level of comparison and office floorspace are required and can be delivered and what other uses are suitable.

5.22 There has been no significant change in the amount of open space available across the Black Country over the past decade. However, revised open space needs assessments and changes in population have resulted in changes to open space standards, methods of calculation and the amount of open space per 1,000 population. Currently Walsall, Dudley and Sandwell fall below the current quantity standard for open space and Wolverhampton is above standard. Dudley is currently undertaking an open space needs assessment update.

5.23 Poor ground conditions, a legacy of the Black Country’s mining and industrial past, affect much of the area. As ground conditions are a major constraint on delivery, land remediation is a priority for delivery intervention. It is recognised that in dealing with individual development proposals, exceptional circumstances may occasionally arise which result in genuine financial viability concerns, for example where remediation costs are above what could reasonably have been foreseen. The Black Country has a good track record of working with developers to address viability issues and deliver sites.

5.24 The delivery of green belt sites may also raise viability issues with the need for new infrastructure to develop sites or environmental constraints such as flood risk which will need to be mitigated. Delivery work will be undertaken to understand the size of green belt sites required to make developments viable and to deliver the infrastructure needed to support the sites.

5.25 Viability negotiations between Local Planning Authorities and developers aim to secure the maximum value of infrastructure to mitigate the impact of development, whilst working with developers to enable development to come forward. To this end one or more of the following mechanisms can be considered:

Deferred or Staged Payments

Clawback

Phased Viability Assessments

Time Constrained Planning Permissions

5.26 As part of the Core Strategy review the impact of any green belt release on the delivery of brownfield sites will also be considered to ensure that the current regeneration strategy is not undermined.

(1) Funding for Site Development and Infrastructure

5.27 In order for the vision for the Black Country to be realised, investment and funding for site development and infrastructure will need to come from a wide variety of sources including both public and private sector investment, often working in partnership with one another.

5.28 As has been demonstrated by the delivery of development sites in the Black Country since adoption, there has been a key role for the public sector in de-risking development activity and securing delivery.

5.29 The Black Country’s brownfield first approach – while the most sustainable way of meeting development needs – brings with it significant challenges associated with development viability and addressing market failure. The use of public sector resources, assets and funding investment- will continue to play an important role, and will be essential to the delivery of many privately owned development opportunities where development is compromised as a result of higher costs of delivery and relatively low land and rental values. This means that around 25% of the existing Black Country housing land supply and 30% of employment sites are not economically viable under current market conditions. The public sector has the opportunity to address this through its interventions and funding programmes, and by working in partnerships with the private sector to improve the overall return on investment for all partners.

5.30 The positive impact of investment by the Black Country local authorities, the LEP and partners into sites in the form of investment into site remediation and servicing works to change a derelict site into a development opportunity available for early development is evident. I54, Opus Blueprint and Pantheon Park demonstrate that where works are undertaken to address issues of site remediation and infrastructure works developers can offer potential investors’ well-presented sites which are capable of early development- noting that all three schemes were all delivered through public sector intervention.

5.31 Examples of key sources of potential public sector funding include resources available through the Black Country Local Enterprise Partnership (LEP) which is focused on creating greater economic prosperity across the Black Country area, identifying the need for infrastructure and environmental enhancements as a key stimulus for economic development. The LEP’s City and Growth Deals provide loan and grant funding to a range of capital investment projects. The Black Country Enterprise Zone (in Dudley, Walsall and Wolverhampton) provides a facility for the LEP to retain future business rates generated by employment/ commercial uses and use these to pay back local authority prudential borrowing that is used to front fund infrastructure improvements. New Housing Zones in Sandwell will also provide interventions to support the delivery of key housing sites.

5.32 The West Midland Combined Authority aims to improve the quality of life of everyone who lives and works in the West Midlands, with priorities on Transport, Housing, Skills and the Economy. The West Midlands Strategic Transport Plan ‘Movement for Growth’ identifies a range of priority infrastructure projects, including local rail improvements, transport interchanges and park and ride sites. Recently the WMCA launched its Collective Investment Fund- a loan facility for commercial development and from later this year (2017) around £200m of funding to unlock constrained Black Country sites will be made available through the ‘Land Remediation Fund’.

5.33 These programmes and funding streams should provide enough support to bring forward a sufficient supply of land to meet short to medium term needs as set out in the existing Local Plan. The Black Country authorities will continue to work with the LEP, WMCA and key Government agencies including the HCA to ensure that their policies and programmes continue to be aligned with Black Country priorities.

5.34 For the Black Country vision to be achieved it is essential that new developments address their impacts directly and provide the on and off-site physical, social and green infrastructure needs associated with the development, especially where overall scheme viability allows.

5.35 There are a number of mechanisms that can be used to secure and deliver necessary infrastructure through the planning system depending upon the circumstances:

5.36 Planning Conditions can be used to secure a good quality development and reduce any adverse impacts including the provision of on-site infrastructure.

5.37 Planning Obligations are used to secure affordable housing and, where it can’t be secured through a Planning Condition, infrastructure that is necessary to make a development acceptable by mitigating the direct impacts of that development either through onsite provision or financial contributions for off-site delivery.

5.38 Highway Authority Obligations (Section 278 Agreements) can be used to secure highway improvement works relating to the Strategic Highway Network.

5.39 Community Infrastructure Levy (CIL) is a charge that Councils can apply to most types of new development. The proceeds of CIL can be pooled and spent on more generalised local and, where necessary, sub-regional infrastructure to support new development. Dudley and Sandwell Councils have adopted CIL Charging Schedules. At present City of Wolverhampton Council do not plan to adopt a CIL. There may be a need to review the use of CIL in response to future announcements from the Government following the Housing White Paper.