Hell and high water
06/01/2009
Hell and high water
05.12.08 Property Week
By Mark Jansen
A growing risk of flooding has blighted development sites across the UK.
On 7 October the vacuum cleaner entrepreneur James Dyson announced that he had abandoned plans to build a design college in the centre of Bath. Flooding issues played an important part in his decision.
Dyson’s planning application was approved by the local council in March but the Environment Agency objected because of the high risk of flooding and in August the application was called in for a planning inquiry. Dyson said this would mean a year’s delay and add £1m to the cost of the project.
The final straw came in October when the government refused to provide joint funding for the college, after Dyson had pledged to contribute £12.5m through his James Dyson Foundation. ‘Faced with a planning inquiry and this government’s recent rejection of our funding proposal, we have no choice but to abandon plans for the school,’ said Dyson in a statement at the time.
Rising sea levels
The problem for the property industry is that flood risk is getting worse, and more and more developments face the same fate as Dyson’s college. The reason is climate change. Planning policy statement 25 (PPS25), issued in January 2006, requires all local authorities to undertake a strategic flood risk assessment for their area. Crucially, PPS25 requires an additional 20% to be factored into the calculations to allow for rising sea levels and higher rainfall over the next 100 years because of climate change.
In cities as diverse as Bath, Portsmouth, Southampton, Harwich and Chelmsford, these assessments are leading to schemes being rejected and radical plans are being hatched for developers to contribute to stronger flood defences.
Bath and North East Somerset Council completed its own assessment in April. Anne Harrison, environment and planning barrister at law firm Beachcroft, who represents several clients wanting to build in the town, says: ‘most of the centre of Bath is now shown to be in a flood plain’. Dyson and other developers are running into objections as a result.
In a statement, the council did not comment directly on Harrison’s allegations but said a further assessment of flood risks will be completed early next year. It is working with the Environment Agency on decisions about future flood defences. It also confirmed that developers whose schemes have flooding implications ‘will be asked to contribute towards the flood defence system’.
‘It is the type of major infrastructure, costing millions of pounds, that you can’t expect one developer to fund,’ says Harrison. ‘We have a client that would like to build in the centre of Bath, but they have been told that they need to find a way, either on their own or collectively with other landowners, of providing a solution to the flood risk before the development would be acceptable.’ The council has yet to explain the full extent of the works that need to be done; Harrison believes the council is ‘biding its time’ because the development market is currently so poor.
In Portsmouth, city planners have proposed that developers be asked to contribute to the strengthening of sea defences. The idea is part of the city’s draft ‘core strategy’, that will underpin local planning policies if it is accepted after further consultation and submission to central government.
Mike Algrove, assistant director of planning services at the city, says the council expects that the Environment Agency will pay for the city’s defences to be strengthened to withstand flood events that could be predicted to occur once every 200 years, but the council would like to go further. ‘We are suggesting that we take a levy from development and enhance the overall standard of our defence to perhaps one-in-a-1000-years events,’ he says.
‘Portsmouth is surrounded by water, given the amount of property investment that is here, we should have a higher standard of defences than one in 200 years,’ he adds.
Ship shape
One developer that has a strong interest in the city’s flooding policies is Quadrant Estates, which bought the 22 acre former Vosper Thornycroft shipbuilding site in Portsmouth in October in a joint venture with Amazon Investments.
Part of the site was previously under option to housebuilder Taylor Wimpey, which gave up after its development plans were rejected by council officers because, in Alcroft’s words: ‘They couldn’t provide a flood risk assessment which showed that the site would be safe.’ Quadrant plans a mixture of employment and residential development. Christopher Daniel, director at Quadrant, says it aims to overcome flood objections by raising the residential element high above ground level, with the employment use on the ground floors below it.
Quadrant also hopes to persuade the local Environment Agency office to take a less stringent view of the site. According to Daniel, the agency has previously insisted that there be ‘safe access and egress’ to the Portsmouth site even in the worst-projected flood event, so that evacuees could wade across safely. However, in other regions the agency has accepted the provision of ‘safe refuge’ from flooding, such as raising the residential accommodation above ground level, as adequate protection. A common problem nationally would appear to be the lack of understanding by the EA and local authority on how the PPS25 should be initially interpreted, and later implemented as part of any planning application. This is leading to an inconsistent roll out of a Policy that was supposedly introduced to help simplify the flood issue.
‘We would like to persuade the authorities to adopt the same approach as elsewhere,’ says Daniel. Although these are issues that relate specifically to the Vosper Thornycroft site, Daniel is aware of the council’s ambition to make developers pay towards the cost of better flood protection for the whole city.
‘They haven’t asked directly [for money], but it’s certainly something that we would anticipate,’ he says.
In Chelmsford, a flood risk assessment completed by the borough council in April has blighted much of the Town Centre. Ian Howes, urban designer within the planning department, explains that the assessment had to include a worst-case scenario of both of the rivers that flow through the town centre bursting their banks at the same time in the event of extreme rainfall.
‘We have to take this possibility into account under PPS25, and if we don’t, we are putting people and property at risk,’ says Howes. The council has commissioned the design of flood defences further upstream that will cost around £14m. It expects that the Environment Agency will pay part of the cost but will also look for contributions from developers once the full funding package is confirmed. ‘We don’t yet know how much will come from developer contributions, but they will play a significant part,’ says Howes. Until then, many developments are being held back because of flood risk objections, he adds.
Ben Mitchell, a partner at consulting engineer Peter Brett Associates and a specialist in flood risk, says the problems faced by Chelmsford are being replicated across the country. ‘There are many towns where the planning authority has adopted a strategic flood risk assessment without fully appreciating the implications it will have for their regeneration plans,’ he says.
Stuart Robinson, head of planning at CB Richard Ellis, says many local authorities will struggle to meet housebuilding targets because of the restrictions under PPS25.
‘There is land all around the UK that was earmarked for houses, which now can’t be built upon,’ he says.
Both Harrison and Mitchell predict that many councils will contemplate levies on developers to pay for better defences, but Mitchell suggests these may be difficult to co-ordinate. ‘I wouldn’t like to be the planner that has to put it together. There are places like Chelmsford where it may be do-able, but elsewhere it may go into the “too difficult” pile,’ he says.
This month the Association of British Insurers is due to publish its own guidance on what housebuilders in flood risk areas should do to ensure their developments remain insurable. One thing is certain: the issue will outlast the downturn and will still be waiting to confront developers when the market picks up again.