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Development of pubs in Southwark stifled by withdrawal of permitted development rights

Southwark Council has voted to remove permitted development rights from 188 pubs in the borough with immediate effect.

What does this mean for pub owners and occupiers who had been intending to carry out alterations, demolition works, or even change the use of their premises.

Permitted development rights 

Permitted development rights (PD Rights) allow specified types of development without the need to obtain planning permission.

Article 4 directions

PD Rights can be removed if a council makes an article 4 direction. If PD Rights are withdrawn, planning permission has to be applied for in the usual way, albeit that planning application fees are not charged. Article 4 directions have no effect on development which has already been commenced.

Wandsworth Council made an article 4 direction last year; however, pub owners were not hit with an immediate change – the direction will not come into force until later this year. 

Southwark Council has gone further, in making the direction with immediate effect. 

Under the General Permitted Development Order 2015, immediate article 4 directions can be made where the development presents an immediate threat to local amenity or prejudices the proper planning of an area. Southwark Council has made the decision that the use of PD Rights to change the use, demolish or alter pubs in its borough is sufficient to justify an immediate article 4 direction.

How will this affect pub owners?

The use of PD Rights by the owners of drinking establishments was severely curtailed in April 2015. The following PD Rights were withdrawn for drinking establishments that had been listed as an Asset of Community Value (ACV):

  • Change of use to Class A1 (shops) Class A2 (financial and professional services) Class A3 (restaurants and cafés); 
  • Change of use to flexible use Class A1 (shops), Class A2 (financial and professional services), Class A3 (restaurants and cafés), and Class B1 (business), for a period of two years;
  • Change of use to a state funded school for one academic year; and 
  • Demolition of the building.

Even where a drinking establishment is not listed as an ACV, the owner cannot use PD Rights without first following a prescribed procedure.
Southwark Council does not consider that the ACV legislation affords sufficient protection. That is why it has made an immediate article 4 direction.

What can pub owners do?

Although the article 4 direction has been made with immediate effect, the process is not over. The Council must go through the following stages:

Publication/consultation – the Council must publish notice of the article 4 direction in a local newspaper, formally consult with members of the public, owners and occupiers over a period of at least 21 days during which representations can be made, and place notices up on site for six weeks. The direction comes into force on the date on which the notice is served on the owners or occupiers of the land, or first published in the press.  The Council must have also started the process of consultation on a non-immediate article 4 direction.

Notification to the Secretary of State - at the same time, the Council must refer its decision to make the article 4 direction to the Secretary of State.

Confirmation – immediate article 4 directions expire after 6 months unless they are confirmed by the Council before expiry.  Councils must have regard to any representations made and article 4 directions can be confirmed with modifications.  Confirmation cannot take place earlier than 28 days after the latest date upon which any notice of the article 4 direction was served.

Notification to Secretary of State – once confirmed, the article 4 direction must be served, again, on the Secretary of State.
There is, therefore, a possibility that the article 4 direction will not be confirmed by the Council, or will be confirmed in an amended form.
Pub owners who are prejudiced by the making of the article 4 direction should consider making representations to the Council.  

Compensation

The withdrawal of PD Rights may give rise to compensation for abortive expenditure, loss or damage which is caused by the removal of PD Rights.  Owners, tenants and those with a contractual right to use the land could be eligible for compensation.

Compensation is, however, only payable if a planning application has been submitted and refused or only granted subject to conditions which would not have been imposed prior to the article 4 direction. Compensation can only be claimed if the planning application is made within 12 months from the date when the article 4 direction takes effect.  The measure of compensation is usually the capital value the property would have had if the planning permission had been granted, compared with the capital value of the property without the permission.

Will other councils follow?

Possibly, however, it is likely that a lot of councils will consider that drinking establishments already have adequate protection under the ACV legislation. If communities are worried about the future of their local pubs, they can already apply to have them listed as ACVs.

Contributor: Alexandra Holsgrove Jones

This publication is intended for general guidance and represents our understanding of the relevant law and practice as at March 2017. Specific advice should be sought for specific cases. For more information see our terms & conditions


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