BULLETIN - ALA4 ALA Bulletin – Spring 2013 TAXATION Revenue get their paws on furnished holiday...

BULLETINIssue 72 – Spring 2013

l Residential developments andaffordable housing

l Infrastructure schemes andtenant farmers

l Revisions to water access rights? l Furnished holiday lettings post-Pawsonl New RPA appeal/complaint procedurel Live & Learn: Share and share alike

FURNISHED HOLIDAY LETTINGS

Revenue get their paws on furnished holiday lettingsPhilip Whitcomb reviews the effect of the appeal decision in HMRC v Pawson

PLANNING

Residential developments and affordable housingThe rules regarding affordable housing are causing friction with some LPAs, asTristan Ward explains

TENANCIES

Infrastructure schemes and tenant farmersMatthew Knight looks at some of the implications of compulsory purchase for compensationof tenant farmers

WATER

Reframing farmers’ rights of access to water through stewardship?Avaibility of adequate water is the focus of revisions to the abstraction regime, asDrs. Mark Shepheard and Bettina Lange report

SINGLE PAYMENT SCHEME

The new Rural Payments Agency appeal/complaint procedureRPA has revised the provisions governing appeals and complaint under SPS. Jo Batchelor andRichard Wordsworth examine the changes.

LIVE AND LEARN (ALA STUDENT/TRAINING SECTION)

Share and share alikeGeoff Whittaker considers some of the vehicles for third party farming of land

OTHER FEATURES

Chairman’s Notes

CEDR Congress 2013

Geoff’s Geottings

Brussels Update

Statutory Instruments

Ecosystem services

Forthcoming events

CONTACT DETAILSGeoff WhittakerEditor/Consultant & AdviserKimblewick Cottage, Prince Albert Road,West Mersea, Colchester, CO5 8AZ.Tel: 01206 383521email: [email protected] ALA Bulletin welcomes readers’ letters or commentsand enquiries from anyone wishing to contributematerial. Photographic contributions will be gratefullyreceived and credited accordingly. The ALA Bulletin doesnot accept advertisements but is happy to insert flyers.Eleanor PinfoldConsulting EditorPinfold & Co., 63 Palmer Avenue, Cheam,Surrey, SM3 8EF.Tel: 020 8644 8041; Fax: 020 8641 7328email: [email protected] credits:Cover: Dennis van der Water; Page 4: Nicholas Belton;Pages 7 and 16: Matthew Dixon, Page 9: Dan Mason,Page 10: Geoff Whittaker, Page 11: S. French;Page 13: Deborah Waters; Page 15: Peter Bates;Page 17: David JonesDesigned and produced by Geoff WhittakerDisclaimer: Information in the ALA Bulletin isprovided on the basis that no liability for loss to anyperson caused by reliance upon it is accepted by theAgricultural Law Association or any of its CouncilMembers nor by any contributor, editor or producer

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In this issuewww.ala.org.uk

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Shoot management and firearms use –Sarah Valentine & Jeremy Scott (Winter 2012/13)Holding a wolf by the ears: boundary questions –Bruce Monnington (Winter 2012/13)Mitigating empty property business rates – Sue Lister (Autumn 2012)The bare necessities – When is it justifiable to implya term – Caroline Shea (Autumn 2012)New registrations – the Betterment and Paddicocases – Vivian Chapman QC (Summer 2012)Criminal charges on workplace fatality – Carrie de Silva (Summer 2012)Abolition of non-feudal real burdens – the nextstage of land reform in Scotland – Lorna Ronald(Spring 2012)

In past issues

An archive of materials fromAutumn 2002 onwards is availableon the Members’ Section of theALA website.

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3ALA Bulletin – Spring 2013

AGM 2013Chairman’s NotesPhilip Day, Wilkin Chapman LLP, Louth

First of all may I say what a great honour itis to become Chairman of the Associationas I start my three year term of office. I will

do my best to serve the Association and promoteits interests on behalf of the members.

I pay tribute to two stalwarts of theAssociation. Andrea Nicholls has been a Councilmember for many years and has stepped downfrom the position of Chairman. Andrea has beena regular contributor to Conferences and was inat the outset as a tutor on the Fellowship course.

Roderick Mackay was a member of Councilfor more years than most of us can recall. Heis a past Chairman of the Association and hasalso lectured extensively for us. He has decidedto step down as a tutor on the Fellowship coursehaving been involved from its inception. Inrecognition of his contribution Council hasmade Roderick an Honorary member.

For what they both are and for what they havedone for the Association we give hearty thanks.

At the AGM the Rules of the Associationwere amended. First, the post of AdministrationDirector was abolished. It has been largelysuperfluous since Geoff Whittaker becameConsultant & Adviser. A new officer has beenincluded in the Rules – the Education Officer.Education is central to the aims of theAssociation. We now have the Starter for

Ten, the Fellowship, Conferences and RegionalMeetings.

The second amendment was to increasethe term of office of Council members andofficers from two years to three. YourAssociation is more and more involved withconsultation with various bodies and Councilmembers play a critical part in the process. Itwas felt that a period of two years was tooshort and that no sooner had a memberbecome properly acquainted with the rolethan their term of office could be ending.It is my intention through the Chairman’sNotes in the Bulletin to keep you advised ofwhat Council is doing for you.

The new website will shortly be launchedand can I echo what Geoff said in the lastBulletin. If you come across updated legislation,particularly secondary legislation, or caseswhich may be of interest please let Geoff know.By doing this we will be able to offer a betterservice to all members. It is better that hereceives information twice (or more times)than not at all!

The industry which we serve is facing manychallenges. We can do little about the inclementweather which has beset us over the past twelvemonths and which is causing serious problems toall sectors. I only have to drive between my

offices in Lincolnshire to see how it is affectingthe arable sector. What we can do is make surewe are at the forefront of the advice we can giveto the industry as a whole.

With legislation (both National and European),regulation and the taxation regime becoming evermore complex it is essential that those advisingshould be up to date and cognisant of all thechanges. Your Association is here to help youdo that.

I am always happy to hear from members ifthey have anything they wish to raise. I can becontacted at [email protected]

Philip Day, Chairman

Chairman:Philip DAY, Louth; (01507)350162;[email protected] Chairman/Financial Director:Graham SMITH, Burwell (01638)744620;[email protected] Members:Michael HOLLAND, Stamford; (01780)484520;[email protected] LLEWELYN JONES, Pumsaint;(01558)841550; [email protected]

Rachel McKILLOP, Cambridge;(01223)326600; [email protected]

Bruce MONNINGTON, Cambridge;(01223)431759;[email protected]

Paul PRIDMORE, Kettering; (01536)412464;[email protected]

Julie ROBINSON, Spalding; (01775)842618;[email protected]

Martin RODGER, London; (020)7353-2484;[email protected]

Rosanne TWEDDLE, Leeds; (0113)244-6100;[email protected]

Co-opted Members:Nick FAGG, Uckfield; (01825)761555;[email protected]

Helen GOUGH; Stratford on Avon;(01789)293259; [email protected]

ALA Council 2013/14At the Annual General Meeting at the beginning of March, elections were held for vacancies to be filled on Council. There were nine candidates for

five positions. Rachel McKillop and Bruce Monnington were re-elected to serve for a further term of three years and Michael Holland, Paul Pridmoreand Julie Robinson were elected for their first three year terms. Our congratulations go to all concerned and our thanks and commiserations to those whowere unsuccessful. As a result, the composition of ALA’s Officers and Council for the coming year is as follows:

Philip Day

4 ALA Bulletin – Spring 2013

TAXATIONRevenue get their paws onfurnished holiday lettingsAn update on HMRC v Pawson[2013] UKUT 050 (TCC)Philip Whitcomb, Trethowans LLP, Salisbury

About half of all UK farms use some formof diversified activity in their farmingbusiness bringing in an average of over

£10,000 of extra income annually per farm.A common form of such diversification isfurnished holiday lets (FHL). These not onlyutilise traditional agricultural buildings no longersuitable for modern farming machinery, but alsothose buildings and the income generated fromthem may benefit from certain tax reliefs.

For income tax and capital gains tax purposesFHLs are treated as a trade provided certainconditions are met on the number of days theproperty is occupied. However, the test forinheritance tax relief is quite different.

These properties can be quite a valuableasset and consequently how the value is treatedon the death of the owner and whether theyqualify for inheritance tax relief becomes animportant issue in capital tax mitigation planning.Clearly the buildings no longer qualify forAgricultural Property Relief because they areno longer occupied for agricultural purposes.Attention therefore focuses on whether FHLsqualify for Business Property Relief (BPR).

For BPR to be available there has to be abusiness predominantly engaged in trading.This can include the provision of services.However, BPR will not be available to a business

which consists wholly or mainly of holding ormaking investments. FHLs are clearly a businessbut the question is whether they meet the “whollyor mainly” test.

In 2008, HMRC changed its internal guidanceand stated that when a claim for BPR was madeon a FHL, this should be resisted unless the levelof services provided was significant. EssentiallyFHLs are rent producing assets, and even ifadditional services were provided, the rentalelement generally exceeds the incomeattributable to the services provided. Onthese assumptions FHLs would fail the “whollyor mainly” test and consequently would notqualify for BPR.

In late 2011, the First Tier Tax Tribunaldecision in the Pawson case raised the possibilitythat FHLs would qualify for BPR where onlyminimal services were provided. The facts in Pawson Nicolette Pawson owned a 25% share in aproperty in Suffolk at the date of her death.Her daughters owned the remaining share.The property was situated on the Suffolk HeritageCoast and was used as a FHL. Family membersoccupied the property for three weeks each yearpaying an adjusted amount in accordance withHMRC’s guidance for private use. Otherwise, it

was let out to the public on short term lets lastinga few days to two weeks.

The property was let fully furnished withheating, hot water, TV and telephone and afully equipped kitchen. The services offered hadincreased over time in line with expectations fromholidaymakers. Mrs Pawson provided clean bedlinen and a cleaner and caretaker were employedto clean the property between lettings. The First Tier Tribunal’s decision The tribunal decided in favour of Mrs Pawson’sexecutors and held that the property qualified forBPR. The key reasons were:l The FHL had the hallmarks of a business in

that the services provided were enough forthe property to be classified as a tradingbusiness, rather than an investment.

l Despite the fact that the business did notalways make a profit (particularly in the earlyyears), it was let with this in mind andgenerally for financial gain for the owners.The business had been profitable for two ofthe three years before Mrs Pawson’s death.

l The business was not one of wholly or mainlyholding investments as the activities that itentailed would be too onerous to an“intelligent” businessman looking to make aninvestment. Active management was requiredrather than passive investment. Its usualfeatures distinguished it from a lease –the need to constantly find new tenants andto provide services over and above thoseneeded for the bare upkeep of the propertyas a property.

Unsurprisingly HMRC appealed the decision. The Upper Tribunal’s decisionHenderson J determined that BPR should not beavailable because the business merely consistedof holding an investment.

Three areas were considered in detail:Investment activityThe starting point for the Tribunal was “theproposition that the owning and holding of land inorder to obtain an income from it is generally to

continued on p.6 Ø

Geoff ’s Geottings


SPS eligibility –new guidanceAlthough the weather may tell you otherwise,

we are coming again to the season of theyear for SPS claims. A new handbook has beenpublished by RPA for the guidance of Englishapplicants, and it contains one of two updatesof which note needs to be taken.

The section on land eligibility has beenexpanded and has particular relevance to landsubject to dual use.

The starting point remains that all agriculturalland, whether eligible or not, needs to bedeclared on the form. The definition of agriculturalland – arable, permanent grass, nursery crops,short rotation coppice – is unchanged, but thereis a new section dealing with what is meant byherbaceous forage.

The 2013 handbook largely repeats thetextual commentary from previous editions, butadds a table showing detailed land uses and theircomparative elegibility to be counted towardsSPS, the English Woodland Grant Scheme andthe Environmental Stewardship schemes. It alsoidentifies which uses are classed as temporaryand which as permanent.

Cases of dual use need extra care. Thisexpression is taken to encompass cases wherethe claimant for SPS is seeking to match landused by another party for other CAP schemes,such as ELS, ESA or other schemes under theRural Development Programme for England.

The UK has been challenged by the EuropeanCourt of Auditors on its application of the rulesaffecting CAP payments. DEFRA maintains thereis nothing wrong with its approach, but any doubtis likely to go against an applicant.

There is a more detailed explanation of land“at disposal”, which sets out that – fairly obviously– tenancies are acceptable. It is as regardslicences that there is a novelty.

A licensor may say that land is at his disposal“when the licensee (grazier) only has access tograze or mow the land”. A licensee in thosecircumstances is not entitled to use the land.

The implication from this is that licensorswith agreements permitting activities other than

grazing would not be able to use that land andthat licensees, conversely, would.

The question, says the handbook, hinges onwho is to be taken as carrying out the agriculturalactivity, who controls the land and has access toit, who profits from it and what responsibility eachparty has in relation to it, especially as regardskeeping the land in GAEC.

This is clearly a delicate area. Withdisallowance the penalty against the payingagency for getting it wrong, RPA is bound tobe cautious. The more pragmatic amongst youwill doubtless bear that in mind.

2013 SPS ratesmay be down?The EU Commission has tabled a motion to

invoke the financial discipline mechanismfor 2013. This may mean reductions in overallfunding for SPS payments of around 5%.

The effect this will have in the UK dependson the euro exchange rate, which will not be fixeduntil the end of September. However, comparisonwith last year, when the SPS level was held butthe exchange rate fell by 8%, showed a reductionof roughly £20/ha in the lowland rate.

The present exchange rate is around 6%higher than in September 2012, so if the Pillar 1budget is cut as planned and that remains theposition, there may paradoxically be a slightincrease in UK payment rates.

Members should also bear in mind thegeneral caveat in dealing with the CAP that,as with the Reform proper, it is folly to drawconclusions from mere proposals.

CAP movesslowly forwardWhilst we are still not in any position to talk

about CAP Reform ‘agreement’, progessin the climb to that summit has now reachedbase camp with agreement in both the EUParliament and the Council of their respectivenegotiating positions.

Nothing is agreed until everything is agreed,but nevertheless there is an increasing amountof common ground apparent and the so-calledtrilogue discussions between the three decision-makers – Commission, Council and Parliament– which are on track to begin in April will beable to focus on the detail. Therein, however,lies the devil.

There is little point here in trying to go throughthe institutions’ respective positions, not leastbecause the past shows us how often thingscan come in from left field at the last momentand disrupt the thinking.

Julie Robinson of Roythornes, speakingat our conference on succession planning inJanuary, commented that, given the seven-yearcycle of CAP programming and the propensity for“mid-term reviews”, there is only one, or perhapstwo, years out of any seven in which things arestable. That message rings true with us all.

Will, for example, the question of cappingbe devolved to Member States? Will it bepermitted, after all, for those who choose todo so to simply roll foward SPS entitlementsrather than reallocating? Will a way be foundaround the double funding issue to permitagri-environment schemes to qualify towardsgreening?

Still more questions than answers. And evenif there is agreement at the top level by the endof June as planned, itself not guaranteed, thereremains the question of detailed implementingregulations, which will take time to finalise.Although the Commission may well have theuncontentious paragraphs ready, there will beplenty to do come the autumn.

For all you may read or hear, it is not up toany one organisation to negotiate; it is not evenup to the English, the Scots, the Welsh or theIrish to decide: it is a question for the institutionsof the whole of the EU to reach a positiontolerable to all 27 (soon to be 28) Member States.

Where national authorities’ duty principally lies– especially those who campaign so vigorouslyfor the operation of an open market on a levelplaying field – is to make sure that their citizensare not disadvantaged by the way they implementthe EU common policy.

Carry on watching this space!

ALA subsIt is subscription season again, as you willno doubt have noticed with the arrival of yourrenewal invoices. I hope you will agree that,despite the small increase this year, membershipof ALA remains the benefit that we intend it to be.

Many thanks to all of you who have been soquick off the mark in renewing and to those whoplan to do so. May I repeat my annual requestthat when making the payment – whether bycheque or, especially, by bank transfer – youidentify your invoice number in your instructions.It does make life so much easier at this end!

Taxation


Taxation

be characterised as an investment activity”.Just because the family carried on an activebusiness and providing additional services “doesnot detract from the point that, to this extent atleast, the business was basically one of aninvestment nature”.

An investment may be actively managedwithout losing its essential character as aninvestment. Only with providing a substantialamount of services to holiday makers couldone argue that the property was not merelyan investment. Business activities The next step is to consider whether the activitiesundertaken would naturally fall on the investmentside as activities which are generally deemed to

be a letting activity. Examples include findingholiday customers, keeping the property insured,rent collection, repairing the property and sortingout bookings. The judge held that these activitieswere “directed at maintaining or enhancing thecapital value of the property, and obtaining aregular income from its letting”. Though all theseactivities would also need to be undertaken fora trading business in order to qualify for BPRadditional services beyond these would needto be available to holidaymakers. Services as part of the tradingoperationThe third issue considered was whether “theseservices were of such a nature and extent thatthey prevented the business from remainingone of property investment”. In other words,what tasks are deemed generally to relate toa trading activity?

The services need to be substantial andinclude being on call for problems, providingmeals, providing welcome packs, cleaning,a laundry service and telephone and televisionprovision.

The judge concluded that the servicesprovided were all of a relatively standard natureand aimed at maximising the income which thefamily could obtain from the short term holidayletting of the property. Overall, and looking atthe business in the round, this was effectively

“a typical example of a property letting business”and consequently does not qualify for BPR. Action plan for clients So what should you be advising clients in the lightof this recent decision? l Review clients’ existing Wills to ensure those

assets no longer qualifying for BPR are dealtwith in the most tax efficient way.

l Consider switching borrowings to FHLs. l Keep detailed records of the work undertaken

in respect of the FHL.l If the FHL is held in a trust, trustees should

consider the effect of the decision on ten-yearly charges and appointments tobeneficiaries.

l Consider gifting the FHL to the nextgeneration or into trust as capital gains taxholdover relief will apply and the gift would bea potentially exempt transfer for IHT purposes.

l Upgrade the level of services provided toholidaymakers so it does become a tradingbusiness such as providing meals, being oncall to take queries from guests and providingup to date information on local attractions.

l Consider whether the restructuring of thefarming businesses making the FHL anintegral part of the farming activities wouldassist in allowing the FHL to qualify for BPRusing the principles set out in the Balfour case(HMRC v Brander [2010] UKUT 300 (TCC)).

CEDR Congress 2013Luzern, Switzerland – 11th-14th September 2013

l Commission II: Ludivine Petetin, University of Hull –[email protected];l Commission III: Nerys Llewelyn Jones, AgriAdvisor Solicitors – [email protected]

In addition, we are delighted to say thatAlicia Epstein, Leeds University; EricaWilliams, University of Wales Aberystwyth andRhodri Jones, Agri Advisor Solicitors have beenselected as sponsored delegates by the Swiss

Association for Agricultural Law and the CEDR.The Rapporteurs are obliged to submit papers in

response to a questionnaire by the end of May. Thequestionnaire for each of the Commissions is available on the CEDR

website at www.cedr.org and if any Member would like to contribute tothe overall UK response, please contact the relevant Rapporteur.

Any ALA member is welcome to join the party in Luzern. Full details oftimings, costings and how to book are also on the CEDR website.

As noted prevoisly, the XXVII Congress of the CEDR,the Comité Européen de Droit Rural, will take

place in Luzern from 11th to 14th September 2013.The Congress is being organised by the SwissAssociation for Agricultural Law in conjunctionwith the University of Luzern.

The three Commissions at this Congress willbe: Commission I to examine the Legal Statusof Cohabitees and their Children in theAgricultural Enterprise; Commission II’s subjectis the Legal Framework of Environmental Law forAgricultural Production; and Commission III will look atthe Scientific and Practical Development of Rural Law atEU, National and Regional Level and in the WTO.

With thanks to all those who responded to our request, ALA has nowappointed the following Members to act as rapporteurs for the UK:l Commission I: Philip Day, Wilkin Chapman –

[email protected];

Furnishedholiday lets nolonger qualify forAPR so attentionturns to qualifyingfor BPR

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PLANNING

Residential developmentand affordable housingTristan Ward, Macfarlanes LLP, London

When a national housebuilder seeksplanning consent for developmentof land to provide many new units

of housing, it is normal for the planning authority to require that a significant percentage of thenew units are designated as being for affordablehousing.

The National Planning Policy Framework(NPPF) defines affordable housing as “Socialrented, affordable rented and intermediatehousing, provided to eligible households whoseneeds are not met by the market … determinedwith regard to local incomes and local houseprices … [and including] provisions to remain atan affordable price for future eligible householdsor for the subsidy to be recycled for alternativeaffordable housing provision.”

What is less well known is that some localplanning authorities (LPAs) require much smallerdevelopments to contribute to affordable housingas well. In such cases, in developments as smallas five new housing units, one of the housesmay be required to be set aside for affordablehousing, and those undertaking even smallerdevelopments may be required to make afinancial contribution to the LPA’s housing fundsince an actual house cannot be provided.

Either of these scenarios may come to theattention of a practitioner acting for a farmer orlandowner. The requirement to make provisionfor or a financial contribution to affordablehousing applies as much to a farmer convertinga redundant building as it does to a majordevelopment, and thus an understanding ofhow the policy should work is useful.Commercial consequencesClearly a requirement that a significantpercentage of housing must be affordable, orthat a lump financial sum must be paid to an LPA,is a financial burden on a site and its developer.As Pitchford J put it in Barratt Developments plcv City of Wakefield MDC and another:1

“If the target for affordable housing isset unrealistically high, developers will bediscouraged from bringing forward proposalsand social housing needs will not beadequately addressed. The strategy dependsupon profitable development, and profitabledevelopment depends in large measureupon buoyant land values. If prospectivedevelopment land is unprofitable because

it is ‘blighted’ by a social housing burdenit is less likely that the land will be sold fordevelopment and the strategy may, inconsequence, fail to bear its intended fruit.If, on the other hand, the affordable housingtarget is set too low to address need, theCouncil will fail to deliver national policy”.

If a development proceeds in the usual way –an option on conditional contract, with completionfollowing the grant of planning consent – thefinancial burden can be taken into account inascertaining the price paid. Normally, that iscalculated on the basis of a site ready fordevelopment less all the costs of making itready to commence development, including allthose of obtaining and implementing a planningconsent and costs of provision of affordablehousing. Thus the housing costs fall on thelandowner, whose advisers need to understandthe mechanism by which they are determinedso as to give proper advice.‘Financial viability’Where a landowner proposes to provide a newdwelling without having to acquire land andpossibly without selling it once developed, theeconomics are much less straightforward. Ineither case however the financial burden ofor contribution to affordable housing may makedevelopment uneconomic. This is the concept of“financial viability”.2

Financial Viability is clearly fundamentallyimportant in the planning process. But how isit determined?

Where a commercial developer acquiresland, develops it and sells it the process isconceptually straightforward. A site is financiallyviable when the acquisition, development andfinancing costs and the cost of sale (includingin each case legal and agency fees and taxes)together with a developer’s profit are equal toor less than the expected sale proceeds.

Any surplus is available for use in providingaffordable housing (or a financial contributionto it) up to the amount determined by the LPA’spolicy. A site that is predicted to deliver suchsurplus is considered financially viable.Contributions and s.106 agreementsThe provision of affordable housing is normallynegotiated as part of the planning process by wayof a s.106 agreement entered into immediatelybefore the grant of a planning consent. Applicantsthat cannot agree the provision of affordablehousing or financial contribution with the LPA canexpect their application to be refused whateverthe planning merits of the case.

In the case of a financial contribution, thepayment is normally due on implementation ofthe consent, although it may be possible tonegotiate a later payment in some cases, forexample, on occupation or on sale of the


completed development. Note that an affordablehousing provision or financial contribution isin addition to any Community InfrastructureLevy payable.

When drafting a s.106 agreement securinga financial contribution the landowner and/ordeveloper will wish to ensure the money is usedonly for provision of affordable housing, thatreceipts for payments made are provided, andthat once all payments due have been made,reference to the s.106 agreement is removedfrom the local land charges register.

Some LPAs’ policy provides that a contributionmust be used within a given time period; if sothe LPA should covenant to return the moneyat the expiry of the period if the contribution isnot spent.3

Calculation of profitIdeally, a development itself will be easy andcheap, enabling a good surplus of profit so thelocal plan’s requirement for affordable housingcan be easily met, perhaps even with additionalprofit over. Many sites unfortunately are not likethis: contamination may require remediation, ora conversion may be of a listed building requiringtraditional and expensive construction methodsand materials. That would push up costs suchthat the potential surplus profits for affordablehousing is not available. Such a site is notfinancially viable, and provided the assessmentis robust, the LPA will not insist on the provisionof or contribution to all or part of the affordablehousing otherwise required, as recommendedby para.173 of the NPPF.

Even where there are no such difficulties,there is potential for argument betweendevelopers and LPAs over the appropriate levelof development and other costs – and thuswhether a site is financially viable or not – andhow much affordable housing it can support.Developers may be accused of artificially inflatingthe costs of development for example, while LPAs

may be seen as doing the opposite, or squeezinga developer’s legitimate profit.

The industry has found a partial solutionin models under which standardised costs ofappropriate scale and quality are attributed toeach phase of the development and added tothe land acquisition costs. For example, legaland agency fees for land acquisition and saleof the completed units are given at a certainpercentage of acquisition and sale values, asare the developer’s professional constructioncosts. Those costs themselves are estimatedon a pounds-per-square-metre basis.

‘Abnormal costs’, for example for remediationof contaminated land or ecological mitigation,are factored in. Total costs and sale proceedsare then balanced to determine the financialviability of the site.Balance of developmentMost local plans provide that if a proposal for aparticular mix of types of units and tenures ofunit (for example townhouses, flats and traditionalhomes) is not viable then the developer will berequired to explore different mixes to establishwhether profitability – and hence viability – canin theory thereby be attained.

This does not mean that planning consentscan be granted only for the theoretically mostprofitable development: the requirement is onlythat viability is assessed on this most profitablebasis, so in principle a developer can make theaffordable housing contribution required but buildsomething completely different.

By extension, a local planning authority is notpermitted, for example, to insist that a developermay not spend a particular part of its budget on aparticular aspect of the development and allocateit to affordable housing instead despite a potentialtemptation to do so. Only an overall assessmentof construction costs in the round is appropriate.

In this context, Senior Planning Counsel PeterVillage QC has unreservedly advised that anLPA’s attempt to divert sums from the Applicants’proposed development budget to make afinancial contribution to provision of affordablehousing is unlawful, saying “Financial viabilityis [not] to be judged on the basis of the proposedbudget or resources of the Applicants or anyother developer.”

To avoid potentially difficult conversationsabout the relative merits of design versusaffordable housing – a political question ratherthan a planning question after all – a developershould avoid providing too detailed a breakdownof its construction costs, disclosing only a justifiedpound-per-square-metre construction costtogether with full disclosure of abnormal costs.

Notwithstanding the use of the models, thereis a good deal of room for dispute over the‘correct’ level of development costs and values.These concerns are particularly relevant where adevelopment is not a standardised housebuilder’snew-build, but, for example, conversion of a listedbarn. Such an individual project will bring its ownindividual problems requiring bespoke andtypically expensive solutions.Property conversionIntuitively a conversion may seem likely to beless expensive than a new build, but this is notalways the case. The proposed conversion ofa building should be presented to the LPA withdetailed justifications of the expected costsincluding routine but potentially costly aspects(improving insulation, for example), and alsoabnormal yet appropriate costs, such asremediation of dry rot, removal of asbestosor connection to mains water or sewerage.

A sensible developer will wish to be aware ofsuch costs before starting the development in anyevent. Clearly calculation is not an exact scienceand the Courts encourage an approach that leadsto a solution that is roughly correct rather thaninsisting on absolute accuracy.

The developer’s costings are usuallyassessed by a specialist consultant actingon behalf of the LPA. Their experience may belimited to cases of development by commercialdevelopers, and their assumptions made may begeared to that context. For example, the unti salefees may be assumed at levels which may beappropriate to a large scale project but asignificant underestimate if for smallerdevelopments.

Accordingly, as well as providing details ofthe development costs a developer should beprepared to justify the actual costs it has spentand expects to spend on professional fees. Commerciality vs realityIt should go without saying that the developershould carefully scrutinise the assessmentproduced by the LPA’s consultants. In oneexample, the consultant’s estimated value of thecompleted development was carried out by anunqualified person, based on standard figureswithout site inspection or comparable valuationevidence. This ‘valuation’ showed the site to befinancially viable, while a proper professionalvaluation showed it not to be so and no socialhousing contribution was due.

The model process is conceptually clear inthe case of a commercial developer that seeksto acquire land, develop it and sell it; and sucha process and the role of the affordable housing

PlanningPlanning

Attempting todivert sums from aproposed budgetto contribute toaffordable housingis unlawful

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PlanningPlanning

whether or not actually incurred, an allowanceof profit for the developer, and agency andother professional costs of a sale whetheror not the developed property is sold.

I can firmly advise that the Council’sapproach in the Applicants’ case is manifestlyunreasonable. It has no sound basis in policyterms, no sound basis in precedent and ismanifestly unfair.”

A level playing fieldAccordingly the correct approach is to assessa site as if it were being bought and sold for acommercial development in line with the models,with the existing use value of the undevelopedsite being substituted for its purchase price.Appropriate costs for any sums not actuallyspent but which would be spent by thecommercial developer (for example, purchaseand sale fees, and construction costs of worksdone by the family) should also be included.This gives a level playing field for all developers,so that none are advantaged or disadvantagedby a particular set of circumstances.

There is clearly a misunderstanding in someLPAs about the correct way of applying affordablehousing policies. This is deeply unsatisfactory forapplicants. A request that the planning committeedetermine the application is unlikely to result in adecision based on the proper application of policysince few members will have the necessary levelof specialist knowledge to override their officers’recommendation, and the remainder will, quiteproperly, rely on their officers’ advice about suchtechnical matters.

In principle an improper decision is vulnerableto challenge by judicial review, or may be

overturned on appeal. Both these routes aretime consuming, expensive and uncertain. Evenif successful, the time taken and costs involved(absent a successful order for costs against theLPA on an indemnity basis ) will significantly addto the costs of the development both inthemselves and also by reason of inflationof construction costs during the delay, likelyto be a minimum of six months in the mostpropitious circumstances.

In many cases a cost benefit analysis willindicate that it is more sensible for an applicantto simply agree to the demands of the localauthority for whatever affordable housingcontribution or financial contribution that isdemanded. While such an approach may befinancially sensible, it allows abuse of theplanning system and brings it into disrepute.

1 [2009] EWHC 3208 (Admin)2 See 1st Edition RICS Guidance Note to

Professionals Financial Viability In Planning,1st edn.: “… the ability of a developmentproject to meet its costs including the cost ofplanning obligations, while ensuring anappropriate Site Value for the landowner anda market risk adjusted return to the developerin delivering that project”.

3 See Patel v Brent London Borough Council(No 2) [2005] EWCA Civ 644

4 One officer of Sevenoaks DC even arguedthat the applicant’s other property assetsshould be taken into account in assessing theviability of the site and determining a financialcontribution! The ignorance of this approach isboth astonishing and worrying in itsimplications for landowners.

contribution will be familiar to many Members ofALA. However, there will be circumstances, againlikely to be familiar to Members, where thecommercial model does not reflect the facts.

A farming family may not need to acquire theland and the developed unit may not be sold butmay be retained for the use of the family. Thefarming business may even undertake someof the construction itself, for example initialdemolition or landscaping. How are these costs(or more accurately the lack of them) to beaccounted for in assessing financial viability?

On the face of it, it might be argued that costsnot actually incurred should not be taken intoaccount in assessing site viability. For example,Sevenoaks DC has adopted this approach,resulting in sites being deemed viable in manycases where, if it were sold for development,it would not, so that commercial developmentwould have an unfair advantage.4 Peter VillageQC has advised this approach is simply wrong.It is worth quoting his opinion at length:

“The points raised all go to a fundamentalpoint of principle – whether it is appropriateto make a viability assessment on the basisof the particular circumstances of theApplicant, or whether such an assessmentshould be undertaken on an objective basishaving regard to, firstly, industry-wide softwareand secondly, the characteristics anddevelopment requirements of thedevelopment site in question.

In my opinion, the Council’s approach isunarguable and manifestly unreasonable. Itis trite law that planning permission runs withthe land unless there is a proper basis for theimposition of a personal condition on theplanning permission. The planning systemseeks consistency and certainty, and it is forthat reason that the industry has developedindustry wide software. There is absolutelyno warrant for considering the individualcircumstances of any individual applicantbecause to do so will inevitably always leadto different results, and such unpredictabilityis itself an anathema to the planning processand it ignores the fundamental point thatplanning permission runs with the land.

The only proper, sensible and reasonablebasis to approach assessments such as theseis for the planning authority to assume thatthe site will be developed by a developeraccording to the industry wide assumptionscontained in the industry software and takinginto account the development requirementsof the site. The assumptions should includeprovision for costs of acquisition, (includingSDLT and professional fees), financing costs

ALA Bulletin – Spring 201310

TENANCIESInfrastructure schemesand tenant farmersMatthew Knight, Knights Solicitors, Tunbridge Wells

This is a very large topic and too large todo justice to in its entirety in this shortarticle. As a result I am going to focus on

a handful of issues which I hope ALA Memberswill find helpful and informative.

With the government moving inexorablytowards Plan B for the economy, there willinevitably be more spending on infrastructure.While much of this (like Crossrail) will mainlyaffect urban areas other schemes will be in rurallocations and tenanted farms will inevitably beaffected: HS2 is an obvious example.

Those farm tenants with security or longerFarm Business Tenancies (FBTs) will be entitledto Occupiers’ Loss Payments and othercompensation. Farm tenants without securityor shorter FBTs or mere grazing or arablelicences will be unprotected from veryconsiderable losses or disruption caused byinfrastructure or other public works schemesabout which they may have had little or no noticewhen they entered the land in question.

Fences and gates may have been erected,crops may have been sown, livestock may havebeen bought, manure and fertiliser may havebeen applied, drainage may have been mendedor installed and no adequate compensation may

be available from anyone in certain disastrouscircumstances.

The tendency to enter into short FBTs orlicences without professional advice or assistanceis understandable: why spend money on lawyersor land agents when you do not strictly need to?On the other hand paying such professionalsbuys their professional negligence cover as wellas their help and support and if things go wrongsuch cover may well be useful for a tenant farmerwith large, unexpected business disruption lossesto bear. Home Loss Payment for tenants andemployeesA person displaced from their dwelling on landmay have a claim to compensation in the formof a Home Loss Payment under s.29(1)(a) LandCompensation Act 1973 (LCA) which providesthat compensation is payable to a person who“is displaced from a dwelling on any land inconsequence of – … the compulsory acquisitionof an interest in the dwelling”.

To be eligible for Home Loss Payment aperson must have been in occupation of thedwelling (or a substantial part of it) as his mainresidence for one year ending on the datehe is displaced from the land because of thecompulsory acquisition. In addition, the personmust have been in occupation of the land anddwelling in question “by virtue of an interest orright” under s.29(4) LCA, such rights to occupybeing the right of a statutory tenant.

Statutory tenants in occupation of the dwellingas their main residence for a period in excessof one year are therefore able to apply for HomeLoss Payment in the event that an authoritycompulsorily acquires the land (and dwelling)in which they have a recognised right underthe LCA.

The right to occupy a dwelling under acontract of employment is specified as aqualifying right under s.29(4)(d) LCA. Thereforea tenant who has the right to occupy a dwellingunder his contract of employment will be entitledto Home Loss Payment from the AcquiringAuthority where he satisfies the otherrequirements of s.29 LCA by having beenin occupation of the dwelling subject to thecompulsory acquisition (or a substantial part ofthe dwelling) as his main residence for at least

the term of one year ending on the date he isdisplaced from the land. Early removalWhere a tenant gives up his interest in thedwelling before the date on which the acquiringauthority was authorised to acquire the interestthe tenant will not be treated as having beendisplaced as a consequence of the compulsoryacquisition, and he will not be entitled to HomeLoss Payment as a result. It is also worth notingthat a person will not be eligible for Home LossPayment where the compulsory purchase relatesonly to part of a garden, yard, outhouse or annexbelonging to the building in which they have aninterest and which they occupy as their dwelling.

Tenants who do not have the security of astatutory tenancy or are not tenants by virtue ofa contract of employment, are not entitled toclaim for a Home Loss Payment, and will haveto look to alternative forms of compensation thatmay be available to them for compensationfollowing the loss of their interest in land asa result of a compulsory purchase.

Home Loss Payment is calculated at 10% ofthe ‘market value’ of the person’s interest in thedwelling. The maximum payment that can bemade for home loss for displacement caused bya compulsory purchase is £47,000; the minimumis £4,700. The ‘market value’ of an interestreferred to above is the value of the interestas assessed for the purposes of the compulsoryacquisition. In the event that there are two ormore people with an interest in the same dwelling(for example by virtue of joint occupation) the

A tenant whooccupies under acontract ofemployment will,subject toconditions, beentitled to HomeLoss Payment forloss of his mainresidence

“

”


TenanciesTenancies

Home Loss Payment made in each claim willbe equal to the whole amount of the HomeLoss Payment divided by the number ofpeople entitled.Rights of farm business tenantsFBTs are specifically excluded under s.12(1A)Agriculture (Miscellaneous Provisions) Act1968 from claiming compensation following thecompulsory acquisition of the land. Compensationis therefore available under s.48 LCA 1973 inrespect of agricultural holdings only where thetenancy was entered into before 1st September1995. Tenancies which were entered into on orafter that date are excluded from compensationunder s.48 LCA unless the tenancy comes underone of the named exceptions in s.4 AgriculturalTenancies Act 1995, for example on successionby direction of the Agricultural Land Tribunal.

To balance the perceived unfairness of thecompulsory purchase regime for farm businesstenants which that illustrates, the Planning andCompulsory Purchase Act 2004 (PCPA) insertedprovisions for compensation payments forqualifying tenants known as Occupier’s LossPayments and Basic Loss Payments into theLCA effective against compulsory purchaseorders made or made in draft on or after31st October 2004.

A qualifying farm tenant may therefore beeligible for limited compensation under s.33Aand s.33B LCA (inserted by ss.106 & 107 PCPA)in recognition of the losses sustained by farmtenants affected by a compulsory purchase order.Compensation is available for tenants with a“qualifying interest”, being a farm tenancy whichsubsists for a period of at least one year endingon the date when one of the following occurs:l the acquiring authority takes possession of or

enters the land under the CompulsoryPurchaser Act 1965;

l makes a general vesting declaration inrespect of the land,;

l agrees compensation with the occupier; orl the Upper Tribunal determines the amount of

compensation payable.

Although this legislation therefore provides farmtenants with recourse to compensation for lossof their tenancy where they have beenestablished in it for a minimum period of oneyear, it excludes interest of shorter duration, suchas monthly farm business tenancies and licences.Farm tenants with leases of a shorter durationthan one year are excluded from compensationand will not have recourse to Basic LossPayments or Occupier’s Loss Payments.

Thus, under the provisions of s.33A(4) LCA,a tenant who has been in place in his agriculturalholding for a length of time exceeding one yearunder a monthly FBT will be excluded fromreceiving compensation under the Act becausehis tenancy was for a period shorter than oneyear, regardless of the time he has spent inactual occupation of the land.Occupier’s Loss PaymentsFor that reason, tenant farmers would be welladvised to seek an FBT for at least one yearto ensure they have some protection in theevent that their holding becomes subject toa compulsory purchase order in the future.

For those qualifying farm tenants who areeligible for compensation in relation to the

acquisition of their agricultural land, they willbe entitled to Occupier’s Loss Payments ofwhichever is the greatest of:l 2.5% of the value of his interest;l the “buildings amount” (valued at £25 per

square metre of the gross floor space ofany building on the land); or

l the “land amount” valued according to theacreage of the land.

For land not exceeding 100ha, compensationis payable at £100 per hectare (or part of ahectare). Land exceeding that area is valuedat £100 per hectare for the first 100ha and £50per hectare thereafter for the next 300ha. Themaximum compensation payable by the AcquiringAuthority to a tenant farmer for Occupier’s Lossis £25,000.

A farm tenant eligible for an Occupier’sLoss Payment could also consider makingan application concurrently for a Basic LossPayment, as the qualifying criteria for this ismuch the same as for an Occupier’s LossPayment except that it is not reservedexclusively to agricultural land.

Basic Loss Payments provide compensationin 7.5% of the value of the interest held, to amaximum of £75,000. Unfortunately it is oftenthe case in practice that a lease has little or no‘market’ value, and consequently the Basic LossPayment is nil or a negligible amount.

A claim for an Occupier’s Loss Payment orBasic Loss Payment must be made in writing tothe Acquiring Authority itself or to its agent. Thewritten claim must provide such particulars as theAuthority reasonably requires in order for it todecide whether a compensation payment shouldbe made at all and, in the event that it should, theamount of any such payment.

A tenant may be eligible for limitedcompensation for losses sustained byfarm tenants affected by a compulsorypurchase order if the tenancy subsistsfor a period of at least one year

“”


WATERReframing farmers’ rightsof access to waterthrough stewardship? Dr. Mark L. Shepheard, Banting Postdoctoral Fellow, McGill University, Montréal andDr. Bettina Lange, Lecturer in Law and Regulation, Centre for Socio-Legal Studies,University of Oxford

Regulatory reforms of water abstractionlicensing underway in England seem o place a greater emphasis on water

stewardship as a means to incorporate a widerpublic interest into farmers’ use of water foragricultural production. This article exploresdifferent meanings of water stewardship andits potential for guiding reforms. In doing so italso draws on the findings of a pilot researchproject carried out in 2012, funded by theBritish Academy.

The project involved interviews with twelvekey stakeholders active in farming, its regulationand water management in East Anglia and theNorth-East of England, as well as analysis ofrelevant public policy documents.

The article commences by setting out ourunderstanding of water stewardship. We thenreview the changing policy context for waterregulation in England. In the main part of thearticle we present further conceptions of waterstewardship as developed in interviews bykey stakeholders. We conclude by identifyingimplications of changing conceptions of waterstewardship for farmers’ access to water. What is water stewardship?Stewardship is a key element of contemporaryenvironmental regulation. It means that thosewho access and manage natural resourcesassume a guardian role to protect resourcequantity and quality now and for futuregenerations.1 This aims to incorporate a widerpublic interest in the exercise of individual rightsand entitlements, for instance by those who enjoyprivate property rights over natural resources.But how exactly a wider public interest can bereconciled with individual interests remains anopen question.

Water stewardship more specifically can beunderstood as protecting water resources frompollution and depletion.2 Depletion of waterresources, in particular periodic water scarcity,is becoming an increasingly central challengefor water management. Tackling water scarcityis a less developed aspect of water stewardship.

Water scarcity has been less subject to legalregulation and public policy development thanpollution of watercourses.

Hence we seek to further develop conceptionsof stewardship in the following section below byconceiving of stewardship as the outcome ofinteractions between the values that informindividual stakeholders’ perspectives and thepurposes of formal legal regulatory regimes.In more practical terms stewardship is a frameof reference that sanctions particular watermanagement behaviour.

This frame of reference provides justificationof the conservation of water in the followingterms:(i) as good business sense generating

favourable economic outcomes; and(ii) as a moral necessity in order to achieve

sustainability.Water stewardship is further promoted bya changing water policy framework that alsoresponds to climate change related extremeweather events, such as alternating floodsand periods of water scarcity.

We briefly review the changing water policyframework in the next section. Changing water policy in EnglandThe UK government’s recent White Paper Waterfor Life3, as well as the National Water ResourcesStrategy4 and some catchment abstractionmanagement strategies contemplate reductionsin water allocations for farmers. The White Paperacknowledges the European Union WaterFramework Directive5 as a key legal driver forhalting damage to natural water systems fromthe impacts of land use and abstraction.

Hence, the UK Government seeks secure,sustainable and resilient use and managementof water. More specifically, its key commitmentsare: reducing periodic water scarcity by using anintegrated catchment approach; recognisingfarmers as custodians of the environment; and,tackling unsustainable abstraction through areformed abstraction regime as well as reducingbarriers to trade in water entitlements. It identifies

these commitments as moral and economicimperatives.

The White Paper talks about ‘wise choices’in justifying its policy aim of delivering resilientand sustainable water use.6 Using water wiselyinvolves more efficient use of water. This themeis also reflected in River Basin ManagementPlans.7 In its deliberation of policy reform theGovernment is considering whether the currentwater abstraction regime in England really meetsthe test of wise water management.8 In thefollowing section we provide some examplesof how farmers themselves think about themeaning of wise water management andhence water stewardship.Water stewardship as goodbusiness practiceA key element of farmers’ understanding of waterstewardship is to perceive efficient water use asenhancing the commercial viability of the farm, asillustrated by the following quotes taken frominterviews:

“I’m trying to build up food production byimproving soil quality, soil moisture retention,how we handle water, how we retain water onthe farm, which is a stewardship issue, but it’sbeing done for financial reasons.”“Product quality and output are what isimportant for the commercial survival ofthe farm.”

Hence, the economics of production and returnon investment in irrigation technology drive watermanagement practice. According to anotherinterviewee, efficient water use is a matter ofgood business sense and commercial realityis a driver for water stewardship.

The type of landholding farmers had couldalso influence how they perceived the commercialrealities of water stewardship. Being a tenantcould mean less scope for farmers to developstewardship measures for water use iflandowners thought that these would diminishthe value of the land or increase the risk of areduction in the income derived from farming


potentially affecting rent levels chargeable for theagricultural tenancy.

Moreover, tenant farmers reported difficultiesin accessing bank loans to provide the capitalnecessary for building reservoirs. Short-termfarm business tenancies, referred to as ‘quarryfarming’, were in particular singled out as illsuited to developing a long-term stewardshipconception of water use on the farm. But ourinterviews indicate that water stewardshipwas not just understood in terms of goodbusiness sense, but also in terms of broadersustainability concerns. Water stewardship as satisfyingbroader sustainability concernsAnother conception of water stewardshipemphasizes its potential to address broadersustainability concerns. From this perspectivefarmers are good citizens, addressingenvironmental problems and societal demandsin the management of water resources:

“We’ve got the water there today and wemake sure the same amount is there for thenext generation and the generation afterwards[…] it’s future proofing.”

But this was not intended to mean that farmers’right to water should be significantly curtailed.The sustainable dimension of water stewardshipis also highlighted in the following farmers’comment:

[Water stewardship] is “getting the maximumamount of crop for every drop of water weput on, at the same time as conserving theenvironment. I have to make sure the wholething goes properly, not just conserving water.You cannot divorce the water from everythingelse, it’s part of it.”

This holistic approach, combining land and watermanagement, was echoed in another farmerresponse:

“My view on water stewardship is that it’s avery, very precious resource. We don’t lookafter it enough. We don’t appreciate it enough,certainly. We need to use it better, and that’sas much down to soil management as it iswater management… I think we have tounderstand that we have to start using itmore wisely.”

This emphasis on combining land and watermanagement in order to ensure long-term watersecurity for all of society, is also reflected in thefollowing, from an interview with a farm lobbygroup:

“British agriculture for the past half centuryor century, has [had] land and water

management around getting water off landand out to sea as quickly as possible. Butwhat’s that resulted in? That’s resulted inletting all our water escape before we cancapture it. Do we need to re-think to someextent the fact that we need to manage landand water courses to hold water more thangetting it away? There’s the relationshipbetween what farmers are doing on the landand the impact for water.”

But even where farmers thought of waterstewardship as addressing wider sustainabilityconcerns, the idea that water stewardship shouldnot jeopardise the commercial viability of the farmwas stressed. In this sense water stewardshipwas understood as “conserving and enhancingwater, but with an element of reward.” Farmerswere suggesting, for instance that there shouldbe funding to help them to build infrastructure forwise water use. For example, building a reservoirwas also perceived as a business opportunity, inparticular when the costs of building the reservoircould be recouped by farmers through sellingwater to other farmers in times of low summerriver flows. A further key dimension of waterstewardship was local water sharing.Water stewardship as locallymanaged water sharingFarmer abstractor groups can provide animportant institutional framework for debatingconceptions of water stewardship and fordeveloping local water sharing arrangements.For example, water abstractor groups (WAGs)exist to manage the risk of water scarcity andprotect farmer’s access to water.9 They are aforum that enables the negotiation, planning, andthe development of water sharing arrangements.

The Lark Abstractors Group in East Anglia isseen as a model of farmer collaboration for watersharing.10 According to one interviewed regulator,it provides a means to better management ofwater scarcity in drought periods, and a forumfor developing awareness about who requireswater, and where; giving greater scope to share.

The group also helps to develop relationshipswith the regulator. The regulator receivesfeedback from farmers about water sharingarrangements that work for a particular situation.This can also help to minimize the risk of theinvocation of formal restrictions on water useunder s.57 Water Resources Act 1991.

Our research showed that farmers in the WAGretain their individual water licences but choose tonegotiate – as a group – a temporary reduction inwater use with the regulator, and share remainingwater between group members. All individuals inthe group cede some allocation, seeking to makethe most of their licences when they really needthe water in summer.

In 2012, the Lark WAG was a forum for theregulator and farmers to negotiate a 20%voluntary reduction in farmer’s access to water,and thus helping to avoid the risk of enforcedreductions.11 This helped to improve watersharing among farmers in the group, thus tacklinganticipated summer water scarcity.12 Hence theLark Abstractor Group reflects an approach towater stewardship that involves informal andtemporary adjustment of private water use rightswhile protecting individual access. Implications of the development ofstewardship approaches for futureaccess to water by farmersTo summarise, water stewardship is becominginfluential in shifting conceptions of farmer’s

WaterWater


access to water from being merely a matter ofindividual rights and entitlements towards aconception that recognizes the importance ofsustainable water management in the interestsof various interests in water, those of domesticconsumers, the environment itself andindustrial users.

Particularly promising seem to be waterabstractor groups for managing the tensionsbetween different interests in water. They arean important institutional framework forintegrating commercial and sustainabilityexpectations in understandings of waterstewardship that can be tailored to specificcircumstances and particular droughtscenarios. But farmers thought that theirindividual rights of water use should only beadjusted in the interests of stewardship, inexceptional circumstances or where cleararrangements are in place to reward them.

Hence, further measures are neededto both encourage reductions in water use,and to provide incentives for sharing if aneffective shift toward water stewardship isto be achieved.

1 Richard Worrell and Michael C. Appleby,Stewardship of Natural Resources:Definitions, Ethical and Practical Aspects,12 (2000), Journal of Agricultural andEnvironmental Ethics, 263.

2 HM Government, Water for Life: The WaterWhite Paper (2012), 64: see www.official-documents.gov.uk/document/cm82/8230/8230.asp

3 Ibid.4 Water for People and the Environment,

Water Resources Strategy for England andWales, Environment Agency, March 2009:see www.environment-agency.gov.uk/research/library/publications/40731.aspx

5 Directive 2000/60, OJ L 327, 22.12.2000,1–73

6 See also HM Government NaturalEnvironment White Paper, The NaturalChoice: Securing the value of nature(2011), 35: www.official-documents.gov.uk/document/cm80/8082/8082.asp

7 See www.environment-agency.gov.uk/research/planning/33106.aspx

8 See The Natural Choice, op.cit. 30.9 Jerry Knox and others, Working together to

protect water rights (undated): seewww.ukia.org/eeda_files/4927%20WAGs%20Brochure.pdf

10 Ibid., 7.11 i.e. under s.57, Water Resources Act 199112 The arrangement did not have to be put

into practice due to excessive rainfallaffecting the area later in the summerof 2012.

SINGLE PAYMENT SCHEMEThe new Rural PaymentsAgency appeal/complaintprocedureJo Batchelor and Richard Wordsworth, National Farmers Union

At the end of 2012, the RPA unveiled itsnew appeal and complaints procedure,which will be applicable to all schemes

it administers. The new procedure means that,in the initial stages, complaints will be dealt withthrough the same process as appeals, with manysimilarities with the old procedure, which manypractitioners will have come to know well.

It is hoped that the new procedures will offera higher standard of customer service, andensure that appeals and complaints are resolvedas early as possible. To ensure that this is thecase, the RPA has also reviewed the powers itsadvisers have at each level to resolve complaintsand appeals, including dealing withmaladministration-type issues.Transitional arrangementsThe RPA has confirmed that those on-goingappeals which had reached Stage 1 under theprevious SPS Appeals Process before theintroduction of the new process will continue tofollow this old process. The new procedureAlthough the procedures are now the same forcomplaints and appeals, it is still important to beclear about whether the issue being raised is acomplaint or an appeal, so that the correctinformation can be provided to the RPA.

If you are challenging a decision which hasbeen reached by the RPA (e.g. challenging thelevel of penalty imposed or challenging a decisionto remove a parcel from a claim) it is likely to bean appeal.

If you are unhappy about the way in which amatter has been handled (e.g. a delay in dealingwith correspondence or a delay in notifying thefarmer of a decision) it is likely to be a complaint.PreliminaryBefore submitting an appeal, if you wish to speakto the RPA or for responses to be addressed toyou, rather than the farmer, consider whether youhave sufficient authority to contact the farmer onthe RPA’s behalf. If you have not previously beeninvolved with that farmer’s claims it may benecessary to complete an SP9 (empowerment)

form. Considering this at the outset could preventdelays in dealing with your correspondence.

This may sound obvious, but it is alsoimportant to ensure that you are familiar withthe scheme rules relevant to the issue inquestion. For cross-compliance breaches,it is also worth referring to the RPA’s VerifiableStandards,1 which provide useful informationabout how the RPA classifies breaches of thevarious different standards. This is importantas understanding the rules is the key to draftingeffective grounds of appeal. Step 1 – First representations to RPAIf a farmer is unhappy with an RPA decision, orthe way in which a situation has been handled,the first step is to contact the RPA CustomerService Centre or the Whole Case Worker, byphone, post or e-mail. If contacting the RPA byphone, keep a record of the conversation, andconsider asking the RPA for written confirmationof the discussion (particularly if they have agreedto do something or provided complexinformation).

At this stage, it is important to clearly explainthe reason why the claimant is unhappyor believes the decision is incorrect iscommunicated to the RPA. It is important toensure that sufficient detail is provided (e.g.if asserting that an error is an obvious error,explain why the error should have beenobvious to the RPA from a simple examinationof the application).

If there is any documentary evidence whichsupports the assertion it would be useful toattach a copy of that document to the appeal.Ensure that all documents are labelled clearly,and explain their importance to the RPA. Anyparticularly relevant features could be highlightedso that it is clear to the RPA what the documentshows and why it is important.

The RPA should acknowledge receipt of aletter at this stage; if you do not receive anacknowledgement consider whether it isnecessary to contact the RPA to confirm thatthe letter has been received. It aims to resolvethe issue within 15 working days; if it is unableto do so it should explain why, and when aresponse can be expected.

WaterWater


Single Payment SchemeSingle Payment SchemeStep 2 – Complaints resolutionIf the complaint/appeal is not resolved quicklyat Step 1 it is possible to ask for it to beconsidered by the Complaints ResolutionTeam (CRT). This is a team dedicated to dealingwith appeals and complaints, so the membersof the team should not have had any previousinvolvement in the case.

Again, when writing to the CRT, provideas much information as possible, to enablethe complaint/appeal to be resolved effectively.Consider whether it is necessary to respond toanything said in the Step 1 decision. It should beexplained why it is believed that the CustomerService Centre’s/Whole Case Worker’s decisionis wrong or unsatisfactory.

The CRT aims to resolve complaints/appealswithin 15 working days. If this is not possible theCRT should contact the claimant or their adviserto agree a plan for resolving the complaintor appeal.Step 3 – Complaints reviewIf the CRT cannot resolve the complaint/appeal,the next step is a Complaint Review, by a teamwhich has not previously been involved in thecase. This is very similar to the old “Stage 1Appeal”.

Again, provide as much information andsupporting evidence as possible.

The Review Team aims to respond tocomplaints/appeals within 30 working days.If the claimant is still not happy what happensnext depends on whether the claimant has madea complaint or an appeal.

The fact that the case is now looked attwice by teams dedicated to dealing with appealsand complaints means that farmers now have anextra opportunity to present their case, beforereaching the independent panel stage.Complaint Step 4 – ParliamentaryOmbudsmanIf the claimant is still not satisfied with theoutcome of a complaint, they can contact theirMP and ask for the complaint to be referred tothe Parliamentary Ombudsman.

Further information on the Ombudsmanprocedure can be found on the Ombudsman’swebsite.2 The NFU also produces guidance onthis procedure for its members.Appeal Step 4 – IndependentPanel ReviewIf an appeal is not resolved at the ComplaintsReview Step, the next step is to request that theIndependent Agricultural Appeals Panel considersthe appeal. In order to do this, it is necessary tocomplete a CA1 form, which can be downloaded

presented at an earlier stage in the process,to increase the chances of success sooner.

A £100 fee is payable for a review by thepanel, which is refunded if the appeal is whollyor partially successful.

At this stage, the claimant can elect to havethe appeal considered on the basis of thepaperwork submitted or having an oral hearing.Oral hearings are relatively informal. The claimantpresents their case to the Panel and the Panelmembers can ask questions to investigate orclarify any points raised. A representative fromthe RPA will be present to explain the SPS rulesif necessary and a member of RPA staff also actsas secretary to the Panel.

The claimant can have legal representationat the Panel hearing, however, there are noprovisions to enable claimants to recover thecosts of such representation even if the appealis successful.

The Panel’s role is to consider whetherscheme legislation and, the RPA’s policies andprocedures have been correctly applied. ThePanel will send its recommendations to theMinister. There is no time limit within which to dothis, although the scheme literature does say thatthe Panel should aim to do so with 60 days. It willthen be for the Minister to decide whether or notto allow the appeal; the Minister does not alwaysfollow the panel recommendation, but if he doesnot he should explain why he has reached adifferent conclusion. Unfortunately there is stillno indication in the scheme literature as to howquickly the Minister should make a decision. After consideration by theIndependent PanelIf a matter has not been successfully resolvedafter the Panel has considered it, it may bepossible to make an application for judicialreview. This will not be appropriate in every case,and as time limits are tight, it is important thatadvisers explain the importance of prompt actionto their clients if they wish to consider this option.

If the claimant is not happy with some aspectsof the way in which their case has been handed

Farmers should put their bestarguments forward at the appeal stageas there is limited potential forchallenging decisions after the appealsprocess has been exhausted

“”

from the RPAwebsite,3 or requestedfrom the CustomerService Centre, andreturn it to the RPAwithin 60 days of thedate of the ReviewTeam’s decision.

As at all otherstages, it is importantthat it is clear from theinformation providedwhy the claimant ischallenging ReviewTeam’s decision, andwhat the claimant ishoping to achieve.New information canbe supplied at thisstage, but whereverpossible, allinformation should be

ALA Bulletin – Spring 201316

(e.g. the time taken to get a decision) then theycould consider making a complaint about thehandling of their case. Fast Track to Judicial ReviewA new feature of the appeals process is thatwhere a case focuses solely on the interpretationof legislation, the RPA could put the appealprocess to one side, allowing the case to bedealt with by way of judicial review from theoutset. If this is a possibility it should bediscussed with the RPA before the appealprocess under the scheme is started.

A Judicial Review will not be a cheap or quickoption so should be considered very carefully,and, as noted above, time limits are very tight,so action needs to be taken promptly. Steps to successMany of the suggestions below may seemobvious, but it is surprisingly easy to overlookone or more of them, with potentially seriousconsequences for the appeal.

The first step is to ensure that you are familiarwith the relevant scheme rules and the guidancedocuments. Rules can change slightly from yearto year, so ensure that you have checked thecorrect version of the handbook.4 This may meanthat an argument which worked in a 2011 case isnot available in 2012 because of a subtle changeto the guidance.

Also, check the RPA’s website to see whetherthere is any other useful information; for example,as mentioned, the verifiable standards (availablein the cross compliance section) explain howbreaches should be classified, and the paymentreduction matrix shows the penalty that eachpotential classification of breach should attract.

Look for hidden pitfalls in any argumentsbeing presented, and consider how thearguments can be worded to ensure that a newhole is not created when trying to climb out of the

existing one. For example, suggesting thatmissing tags were not noticed because the cattleare not seen regularly could raise concerns aboutanimal welfare issues, whereas the reality may bethat the cattle are checked sufficiently to ensuretheir welfare, but not always at sufficiently closerange to notice every missing tag.

Make no assumptions about what the RPAmay or may not know; always provide as muchinformation as possible, and where possible,provide copies of documents, or other materialwhich can provide supportive evidence. Wheredocuments are used, ensure that the purposefor including the document is clear, and highlightany relevant information.

Set out the facts and the reasons for thechallenge clearly and carefully. This is particularlyimportant when raising fact-sensitive arguments,such as force majeure or obvious error. Forexample, simply saying that a Claimant’sapplication was submitted on 20th May becausehe was ill is unlikely to be sufficient for an appeal– having a minor cold would not, ordinarily,prevent someone completing an application;more detail would is required, such as:

“The claimant, who is a sole trader, wasadmitted to hospital with a sudden,unforeseen illness on 15th April. He wasdischarged on 18th May. This is confirmedin the attached doctor’s letter (document 1).He submitted his application on 20th May.The reason for the late submission wascommunicated to the RPA in a covering letterattached to the claim form, thereby notifyingthe RPA within 10 working days of theclaimant being in a position to do so.”

Be realistic. In some cases, it may not bepossible to argue that a breach did not occur,so some degree of penalty may be inevitable.However, it may be possible to argue that abreach is not as serious as suggested, or that

Single Payment SchemeSingle Payment Scheme

the area of land involved is smaller than allegedand therefore to reduce the level of penaltyimposed. It may also be possible to challenge adecision to classify a breach as intentional ratherthan negligent, which can significantly reducethe level of penalty imposed.

It is also important to consider the future, aspenalties will be substantially higher if the samebreach/error is repeated. Do changes need tobe made on the ground to prevent futurebreaches (e.g. improving record keepingsystems)? Do future applications need to bechanged (particularly if the breach relates toland eligibility)?Conclusion The SPS appeals process provides a relativelyquick, simple and cheap method for farmers tochallenge the RPA’s decisions on SPSapplications. It is vital that farmers put their bestarguments forward at the appeal stage as thereis limited potential for challenging the RPA’sdecisions after the appeals process has beenexhausted and the options that are availableare considerably more expensive and timeconsuming.

More information can be found on the RPAwebsite www.rpa.defra.gov.uk under theCustomer Focus tab.

1 See www.rpa.defra.gov.uk/crosscompliance/inspectionprocess

2 www.ombudsman.org.uk3 See www.rpa.defra.gov.uk/rpa/index.nsf/home

> Customer Focus > Complaints and Appeals4 The current version of the Cross Compliance

Handbook for England is at www.rpa.defra.gov.uk/rpa/index.nsf/home > Single PaymentScheme > Forms and Guidance > 2013 formsand guidance. Previous versions are alsoavailable from the Forms and Guidance menu.

In the initialstages of the newRPA procedurecomplaints will bedealt with throughthe same processas appeals

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Live & LearnALA Student/Training SectionLive&Learn


Share and share alikeGeoff Whittaker, Consultant, West Mersea

Those with longer teeth than the rest willremember attempting to avoid thedifficulties of inadvertent tenancy creation

– and the security of tenure that was impliedunder the Agricultural Holdings Act 1986 – bymeans of devices such as licences, contractfarming and share farming.

It is not unreasonable to say that some ofthem did not stand up to strict analysis. Afterall, it is not the label the parties attach to anarrangement which dictates its status, but theapplication of it in practice. However, there were– and are – other good reasons for a landownerto make other arrangements with third partiesthan tenancies for his land to be farmed.

From the draftsman’s point of view,understanding the difference is crucial toavoid consequences which are neither foreseennor desired.LicencesIt has all the hallmarks of teaching Grandma o suck eggs to say that a licence, at its mostsimple, is a mere personal right granted by theowner of land to another party to do somethingwhich would otherwise be a trespass. By itself itdoes not create any interest in the land itself.

A contractual licence to farm, however, willusually involve something more. A croppinglicence, for example, will include terms to dealwith ownership of the crop and a right to removeonce severed from the ground. But whateverits terms, a licence preserves the right of thelandowner to do anything on his property so longas it does not interfere with the right it grants.

Whether this is sufficient for a landowner todeclare the land “at his disposal” for the purposesof the Single Payment Scheme (SPS) is anotherquestion. The 2013 Guidance produced by theRural Payments Agency (RPA) goes into moredetail than before on what may or may notbe acceptable.

It is always for a claimant to satisfy RPA as tothe land’s eligibility, but the Guidance now statesthat a claimant may treat land as at his disposal“when the licensee (grazier) only has access tograze or mow the land”. No further comment ismade in respect of other types of licence but it

may be argued that, by implication, in other casesthe licensee will have that right.

Under the 1986 Act, a licence was treatedin the same way as a tenancy in terms of itsconversion to a secure tenancy no matter whatthe parties may have agreed. Its use thereforewas limited. Since 1995, however, the use oflicence for various agricultural purposes hasgrown and they are now more widespread.Contract farmingA contract farming agreement will certainlyinclude a licence to permit the farmer onto theland to carry out his functions, but it is, of course,much more than that. Its legal essence is of acontract for services, whereby a landowner willhire a neighbouring farmer to conduct the farmingoperations. The relationship is one of principaland agent and the landowner will for tax, SPSand all other purposes be treated as a farmer.

The agreement will normally require thecontractor to provide all the equipment andlabour to carry out the farming, but directionof the operations – cultivations, planting,harvesting, storage, sale and so on – willremain the province of the landowner or hisagent. Although the contractor may be obliged tocarry out management obligations undertaken bythe landowner under Environmental Stewardshipor schemes of that nature, the landowner will

remain primarily responsible for any non-compliance, as he will for breaches of crosscompliance under SPS.

For those reasons alone but also in respectof the larger picture, and however disinclined thelandowner may be to become involved in themanagement of the farm, it would be a mistaketo ignore this aspect and leave it to thecontractor’s discretion, since that goes tothe root of the arrangement.

In terms of remuneration, the contactor willnormally receive a sum to represent his work– more for cultivated land than for fallow, forexample. On top of that he will receive a basicsum, usually calculated on the basis of area,plus a percentage of the net profit in excess ofthat sum. The work-based fee is normally payableat fixed intervals; the balance may be postponeduntil the final accounts are drawn.Share farmingIt is the concept of share farming which causesthe most difficulty, partly at least because of theabsence of a formal universal definition. Partieswill sometimes talk of share farming whenwhat they are actually doing is more akin– dangerously so, some may say – to apartnership. Others use it when what theyhave in mind is contract farming or, indeed,employment in the conventional sense. As noted

18

BRUSSELS UPDATE to 28th February 2013

ALA Bulletin – Winter 2011/12ALA Bulletin – Spring 2013

Commission Implementing Decision 2012/753amending Annex I to Decision 2009/177 asregards surveillance programmes for Finland andthe United Kingdom and the disease-free statusof Finland and the United Kingdom for certainaquatic animal diseases

Commission Implementing Decision 2012/761approving annual and multiannual programmesand the financial contribution from the Union forthe eradication, control and monitoring of certainanimal diseases and zoonoses presented by theMember States for 2013

Commission Implementing Decision 2012/766amending Part A of Annex XI to Council Directive2003/85 as regards the list of nationallaboratories authorised to handle live foot-and-mouth disease virus

Commission Implementing Decision 2012/767designating the EU reference laboratory for foot-and-mouth disease and repealing Decision2006/393

Commission Implementing Decision 2012/785approving certain amended programmes for theeradication and monitoring of animal diseasesand zoonoses for the year 2012 and amendingImplementing Decision 2011/807 as regards thefinancial contribution by the Union for certainprogrammes approved by that Decision

Commission Implementing Regulation1161/2012 amending Annex to Regulation37/2010 on pharmacologically active substancesand their classification regarding maximumresidue limits in foodstuffs of animal origin, asregards the substance fenbendazole

Commission Regulation 1166/2012 amendingAnnex II to Regulation (EC) No 1333/2008 of theEuropean Parliament and of the Council asregards the use of dimethyl dicarbonate (E 242)in certain alcoholic drinks

Commission Implementing Regulation1177/2012 entering a name in the register ofprotected designations of origin and protected

geographical indications [Scottish Wild Salmon(PGI)]

Commission Implementing Regulation1212/2012 amending Regulations 2535/2001,917/2004, 382/2008, 748/2008, 810/2008 and610/2009 as regards the notification obligationswithin the common organisation of agriculturalmarkets

Commission Implementing Regulation1253/2012 publishing, for 2013, the agriculturalproduct nomenclature for export refundsintroduced by Regulation 3846/87

Commission Implementing Regulation 13/2013amending Implementing Regulation 394/2012fixing the quantitative limit for the exports of out-of-quota sugar until the end of the 2012/2013marketing year and repealing ImplementingRegulation 931/201

Commission Regulation 51/2013 amendingRegulation 152/2009 as regards the methods of

above, it is what happens on the ground that isimportant rather than what the written agreementmay contain, but absence of focus at the point ofdrawing the agreement gives a hostage to fortuneand can create problems later.

In the absence of an agreed definition ofshare farming, it may be useful to describe whatit is not.

Clearly, but for the sake of completeness, it isnot a tenancy. A tenancy involves conferring onone party – the tenant – the exclusive right tooccupy, which is about as far from the concept of

share farming as it is possible to go while stillinvolving a third party.

It is also not a partnership. However, thedefinition in the Partnership Act 1890 –“Partnership is the relation which subsistsbetween persons carrying on a business incommon with a view of profit” – strikes closeto home and will guide the draftsman’s thinking.Parties to a share farming arrangement will wantto retain their independence except insofar asconcerns the venture at hand and will want toavoid the unlimited mutual liability which therelationship of partners entails.

The existence or otherwise of a partnershipwill be a question of fact as well as of law, andthe 1890 Act, s.2, needs to be kept in mind.Most share farming arrangements will establisha division of the gross and not the net returns,but while s.2(2) and several decided cases setout that a division of the gross does not implya partnership, provisions which stipulate for asharing of the expenses may lead a court toconclude that a partnership exists. Whilst it maynot even then be conclusive, each party to ashare farming arrangement should considerdischarging a specified category of expenserather than a share of expenses in general.

The share farming arrangement also needs to be presented so as to distinguish it from a

contract of employment. In practice, this oughtnot to be too difficult, because each party willundertake a certain facet of the project, whateverit may be, but will expect to be left in full controlof the method of fulfilling that obligation.

In similar fashion to the role of a contractorunder a contract of services, he should (within theoverall timescale of the project), be permittedcontrol over timing, level of expertise, provision ofplant and equipment and supply of additional oralternative labour.

Assessed positively, share farming is a type ofjoint venture, although that expression of itself isopen to more than one interpretation. It may, forexample, encompass any kind of corporate orquasi-corporate structure: a partnership, whetherlimited or unlimited; a company; a co-operative;or even a producer organisation.Avoidance of doubtIn an arena where there is little clarity and muchdoubt, it becomes even more important thatterms and conditions are utterly clear andincapable of misinterpretation.

It is often said that a high degree of ability touse the English language unamiguously is asimportant to a draftsman as knowledge of thelaw itself, and this is a classic case in point.

Live & LearnLive&Learn

Share farmingcauses difficulty,partly at leastbecause of theabsence of aformal universaldefinition

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analysis for the determination of constituents ofanimal origin for the official control of feed

Commission Implementing Regulation 65/2013amending Annex III to Regulation 826/2008 layingdown common rules for the granting of privatestorage aid for certain agricultural products

Commission Implementing Regulation129/2013 amending Regulation 1121/2009 asregards the transitional national aid to be grantedto the farmers in 2013 and Regulation 1122/2009as regards the reduction related to the voluntaryadjustment of direct payments in 2013

Commission Implementing Regulation131/2013 laying down exceptional measures asregards the release of out-of-quota sugar andisoglucose on the Union market at reducedsurplus levy during the 2012/2013 marketing year

Commission Implementing Regulation165/2013 fixing for 2013 the amount of aid inadvance for private storage of butter

Commission Recommendation 772/2012 onaggressive tax planning

Commission Regulation 1158/2012 amendingCouncil Regulation 338/97 on the protection ofspecies of wild fauna and flora by regulatingtrade therein

Commission Regulation 56/2013 amendingAnnexes I and IV to Regulation 999/2001 of theEuropean Parliament and of the Council layingdown rules for the prevention, control anderadication of certain transmissible spongiformencephalopathies

Regulation 1151/2012 of the EuropeanParliament and of the Council on qualityschemes for agricultural products and foodstuffs

Corrigendum to Decision of the EEA JointCommittee 103/2012 amending Annex I(Veterinary and phytosanitary matters) to the EEAAgreement

Decision of the EEA Joint Committee 153/2012amending Annex I (Veterinary and phytosanitarymatters) and Annex II (Technical regulations,standards, testing and certification) to the EEAAgreement

Decisions of the EEA Joint Committee 154,155 & 191-193/2012 amending Annex I(Veterinary and phytosanitary matters) to the EEAAgreement

Decisions of the EEA Joint Committee 183-187, 191 & 200-203/2012 amending Annex XX(Environment) to the EEA Agreement

See the following Official Journals forinformation regarding cases before the ECJ andother tribunals: C373 (1.12.12); C379 (8.12.12);C389 (15.12.12); C399 (22.12.12); C9 (12.1.13);C26 (26.1.13); C32 (2.2.13); C38 (9.2.13); C46(16.2.13); C55 (23.2.13)

See the following Official Journals forinformation regarding cases before the EFTACourt: C384 (13.12.12); C29 (31.1.13)

SI2012/3033 = Plant Health (England)(Amendment) (No.2) Order 2012 – amendseponymous Order of 2005 (SI2005/2530) –7th December 2012

SI2012/3039 = Animals (Scientific Procedures)Act 1986 Amendment Regulations 2012 –amend Animals (Scientific Procedures) Act 1986to transpose Directive 2010/63 on the protectionof animals used for scientific purposes –1st January 2013 except as stated

SI2012/3093(W311) = Common AgriculturalPolicy Single Payment and Support Schemes(Wales) (Amendment) Regulations 2012 –establishes voluntary modulation rates for 2013 –3rd January 2013

SI2012/3118 = Energy Performance ofBuildings (England and Wales) Regulations2012 – consolidate Energy Performance ofBuildings (Certificates and Inspections) (Englandand Wales) Regulations 2007 with subsequentamendments implementing in England and Wales

Directive 2002/91 of the European Parliamentand of the Council on the energy performanceof buildings – 9th January 2013

SI2012/3143(W315) = Plant Health (Wales)(Amendment) Order 2012 – Welsh equivalentof SI2012/3033 (q.v. above) – 11th January 2013

SI2012/3170 = Energy Act 2011 (Amendment)(Energy Performance of Buildings)Regulations 2012 – amends 2011 Act in light ofSI2012/3118 (q.v. above) – 25th January 2013

SI2013/23 = Plant Health (England)(Amendment) Order 2013 – amends PlantHealth (England) Order 2005 (SI2005/2530) –17th January 2013

SI2013/108 = Non-Domestic Rating(Renewable Energy Projects) Regulations2013 – designate classes of hereditaments inrelation to disregards by billing authority ofnon-domestic rating income for purpose ofcalculations under sch.7B Local GovernmentAct 1988 – 18th February 2013

SI2013/109 = Uplands Transitional PaymentRegulations 2013 – partially implementRegulation 1698/2005 on rural developmentsupport in relation to less favoured areas –15th February 2013

SI2013/336 = Transmissible SpongiformEncephalopathies (England) (Amendment)Regulations 2013 – amend eponymousRegulations of 2010 (SI2010/801) – Englandonly – 6th April 2013

SI2013/390 = Environmental Permitting(England and Wales) (Amendment)Regulations 2013 – amend eponymousRegulations of 2010 (SI2010/675) to transposeDirective 2010/75 on industrial emissions –27th February 2013 except as stated

SI2013/514 = Countryside and Rights of WayAct 2000 (Review of Maps) (England)Regulations 2013 – amend s.10(2) Countrysideand Rights of Way Act 2000 to extend periodsfor review of access maps – 6th April 2013

Instruments with a Welsh reference (W...) apply to Wales only unless otherwise statedThe date stated is the date on which the Instrument comes into force

19

STATUTORY INSTRUMENTS to 28th February 2013

ALA Bulletin – Winter 2011/12ALA Bulletin – Spring 2013

Despite the mild irony of the stated ambition of the hastilynegotiated coalition of two parties with limited experience of

government to be “the greenest government ever”, it had a seriousand unimpeachable intent: to bring into economic account the valueof goods and services provided by the natural environment whichhad previously been taken for granted. Part of the developing policyin that context is the management of and, more particularly,payment for ecosystem services.

The Ecosystem Markets Task Force (EMTF) was set up toreview business opportunities arising from the expansion of thisconcept, and its final report has just been published. Its parentWhite Paper was premised on the fact that, historically, economicgrowth has relied heavily on input from natural resources withoutpaying due regard to the cost of doing so.

It is those elements – goods such as timber and water andservices like pollination, for example, plus indirect contributionsto climate change, soil productivity and water quality – whichare referred to as ‘ecosystem services’.

As the White Paper recognised, by far the greatest service canbe provided by collaboration between government and business.Farmers and land managers have a crucial role to play, for reasonsthat do not need explaining to Members of ALA. Farmers alreadyhave access to the Environmental Stewardship programme inEngland and its equivalents elsewhere in the UK, which focuson the payment for management techniques which maintain andimprove water quality, biodiversity and other environmental benefits.It is now envisaged that that will be taken further, with new types ofvoluntary arrangement between service providers and landownersand managers.

Three pilot projects around the country have been lookingat different aspects of the costing of ecosystem services. InBassenthwaite in Cumbria, the South Pennines and the Devonmoorland, projects are attempting to assess the value of carbon,water, food, biodiversity, recreational and landscape benefits inan integrated way.

One of the main issues from the professional point of view ishow to value those benefits. The type of services are still not clearlydefined and will, of course, vary from place to place. It follows thatthere is little or no market information, so conventional thinking isof limited application.

RICS has published a “Thinkpiece” – From market value tonatural value – suggesting, amongst other things, that new basesand methods of valuation may need to be devised to cope withassets which have not previously been thought of as saleable.

One of the authors of that report is Charles Cowap, of HarperAdams University, who has also been involved with the peatrewetting project being undertaken on Exmoor in conjunction withSouth West Water. Charles will be leading a session on ecosystemservices as part of our coming Conference on 2nd May (see belowand Calendar of Events on the website at www.ala.org.uk)

Charles will be accompanied by Professor Mark Reed ofBirmingham City University, who has been commissioned byDEFRA to work on a peatland carbon code and Dr. David Smith,project manager for South West Water.

But the main point of the session will enable delegates toexchange views. We are at the sharp end of a new area for allconcerned and the ground rules have yet to be fully established.Members and non-Members of ALA will be welcome to come andshare their views and contribute to this groundbreaking work. GDW

Ecosystem services

ALA STARTER FOR TEN16th-18th April 2013Mount Hotel, Tettenhall Wood, Wolverhampton

ALA EAST MIDLANDS24th April 2013Haycock Hotel, Wansford, Peterborough

ALA WEST OF ENGLAND25th April 2013Barclays Bank, Queen Square, Bristol

ALA SPRING CONFERENCE –RENEWABLES AND ECOSYSTEM SERvICES2nd May 2013Copthorne Tara Hotel, Kensington

ALA/WS SOCIETY JOINT CONFERENCEON AGRICULTURE7th June 2013Signet Library, EdinburghCEDR CONGRESS11th-14th September 2013University of Luzern, SwitzerlandALA FELLOWSHIP 201322nd-24th October & 6th/7th November 2013Scarman Conference Centre, Warwick UniversityExamination: 26th November 2013, LondonFor full details of all meetings and other events please see theCalendar of Events on the ALA website, contact Geoff Whittaker on(01206)383521 or email [email protected]

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