WEATHERING THE STORM

Can planning help farm businesses weather the storm of the Agricultural Transition?

Anyone who has been watching a certain Amazon farming series recently will have heard time and again, ‘we are encouraged by Defra to diversify to maintain farming incomes, but the planning system says no!’ Is this statement an accurate reflection on planning policy and is there anything that can be done to mitigate it?

Historically, yes, planning policy was strict on development within the open countryside and dispensation was only granted where it was deemed to be agricultural development. However, in recent years, planning policy has moved on, albeit with a growing reliability on permitted development rights (PDRs) as a way of fast-tracking certain types of non-agricultural development. Certain areas, such as National Parks, AONB’s and conservation areas still have some tighter controls to be mindful of. Green Belt land is also a case in point, see page 13 for more details.

SO HOW CAN FARMING BUSINESSES USE PLANNING TO THEIR ADVANTAGE?

Well, it depends on what the family and farming business needs now and in the future.

Is it to increase production of existing enterprises, generate economies of scale, or provide accommodation for a farm worker / family member to live close by to aid employment retention or succession? Or is it to generate a non-farming income through leisure and tourism ventures, commercial letting space or adding value to a farm product and selling direct to the consumer? Or quite simply capital generation to manage borrowing, pay a family member off or as a retirement strategy?

DO PDR S OFFER PLANNING SHORT CUTS?

Permitted development can pave the way for new farm buildings, unencumbered housing or commercial lettings space on farm where there are existing buildings of an age.

In recent cases we have seen, once permitted development has been granted and the principle of the development accepted in said location, it is easier to apply for full planning to ‘tidy up’ the proposed development. This may be a longer route, but an application for full planning at the outset may not be supported under planning policy.

Class Q

Class Q is a form of permitted development allowing for the conversion of agricultural buildings to residential use for up to a maximum of 5 dwellings. This is a classic example whereby once the principle of housing has been established, a full application to amend details of the development beyond the parameters of the initial restrictions of Class Q, may be supported if you can demonstrate it would be a better design etc. So, modern or more unusual buildings should not necessarily be discounted.

Class Q can work really well to provide worker accommodation (where you don’t mind your neighbours!), or if appropriate and detached from the farm steading, as a capital raising exercise.

Class R

Class R development is an under-used planning policy on farms which allows for the conversion of agricultural buildings to a flexible commercial use including storage and distribution, professional services (e.g. offices), and retail (e.g. shops, cafes etc.). Again, there are parameters to work with initially, but once the foundations are laid there is potential scope to expand.

This is ideal where additional trading income is needed that is not generated from a direct agricultural enterprise, or to support a non-farming family member who wants to diversify with an agricultural product.

Class A

Class A is a useful right to put up new farm buildings, allowing up to 1,000 sq. m of building space every two years – and I have yet to meet a farmer who doesn’t like putting up new buildings!

Using Pdr S Strategically

Permitted development should be used strategically and built into the longer-term plans of the business. For example, Class Q housing prevents further permitted development for 10 years. Therefore, before embarking on a Class Q development, due consideration should be given to whether:

• Any additional development is likely to be required.

• Any further development would best be completed under Class A and Class R permitted development, and the timescales involved.

• Outline or full planning consent should be sought in favour of Class Q development to protect PDRs in the future.

These considerations are typical of the conversations we have had with clients considering on-farm housing for a worker or family member. In recent cases we have recommended clients pursue outline or full planning to protect their PDRs going forward.

PREPARATION IS KEY TO PLANNING SUCCESS!

Taking a fresh look at planning opportunities on-farm is never a bad idea, but the reasons and timings behind an application need careful thought and can be the difference between gaining consent or not, or even landing yourself with large borrowing or a big tax bill! Before venturing off into the world of planning, the key to any successful planning application - whether reported to the planning officer or not - is the financial and business planning that goes before. Having a sound and justified business appraisal will substantially increase your chances of success at planning.

• Will your business need to borrow to complete the development?

• What are your projected returns and how does that stack up against the repayments?

Historical accounts (usually 3 years) are just as important as forward budgets and in certain cases scrutinised to set the trend of the business. For many, there is a temptation to control the bottom line to avoid the tax man, however this can have unintended consequences with planning and the bank later down the line.

A Word Of Caution

Planning can also trigger other issues such as business rates, capital gains or inheritance tax given the scale, change of use or ownership and the possible impacts need to be considered before planning is applied for. Any consent given may affect the valuation of said asset, particularly if the intention is to transfer ownership thereafter.

A further word of caution on planning where a tenant is in situ. The planning process will not support an application for a change of use from agriculture where a tenant is in place and utilising said buildings. Serving notice to quit is not an easy remedy either. Where there is a landlord / tenant relationship, and for matters to run smoothly both in terms of time and costs, it is best to approach any planning application unified.

Some of our recent planning work has seen us obtain planning consent for a lean-to style general purpose building converted into two homes for sale under Class Q, outline consent for a second agricultural worker's dwelling on farm, full planning for a general-purpose building to expand an existing farm enterprise, glamping pods, agricultural roads and accommodation works and in-village redevelopments with farmstead relocation.

PDRs are a useful option and provide a less onerous route than submitting a full planning application. Having said that, nationally, ‘Around 60% of Class Q applications are refused, often due to different interpretations of the rules between planning authority and applicant.’* As such it is prudent to seek professional advice.

An initial assessment of planning potential and a review of your options may be available through the FBAS scheme we are currently offering.

GEORGINA WATSON DIRECTOR 01423 740120 hgw@gscgrays.co.uk