Developers to face carbon off-setting payments up to nine times higher than current levels under proposals

Developers in Westminster must explore retrofit options before demolishing buildings and will face carbon off-setting payments up to nine times higher than current levels under new rules proposed by the local authority.

Westminster would become a ‘retrofit first’ city under a new planning policy put forward by the council aiming to help the borough reach net zero by 2040.

A consultation on the proposals will run for six weeks from 14 March as part of a review of the council’s City Plan, which shapes development policies in the district.

The refreshed plan would also include new measures aiming to increase the amount of “genuinely affordable” housing by prioritising social over intermediate housing in new schemes, and a requirement for all new residential schemes to contribute towards affordable housing.

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Marks & Spencer has successfully appealed the government’s decision to block its plans to redevelop its flagship Oxford Street store. The scheme had been refused partly due to the carbon impact of demolishing and rebuilding the existing buildings.

The local authority said the new retrofit rules would accelerate upgrades to commercial sites and support sustainable growth by providing more energy efficient buildings.

Embodied carbon emissions targets will be applied to all new developments based on benchmarks set by the London Energy Transformation Initiative (LETI) which would aim to cut around 480,000 tonnes of carbon between now and 2040. The targets will depend on the type of building, with affordable housing potentially given more leniency.

Although the policy recognises that demolition and rebuild is the best option in some cases, it encourages developers to “fully investigate” options for retrofit and extension “at the outset” and include whole-life carbon assessments in planning applications.

The council says it wants to change its approach to extensions of existing and historic buildings to become “more flexible” when such proposals unlock retrofits of entire buildings.

The proposed new rules recognise that some heritage buildings require improvements to better adapt to climate change impacts and remain fit for the future, the council said.

Westminster council cabinet member for planning and economic development Geoff Barraclough said: “We will not reach net zero without a significant shift in how we view development.

“That is why we are introducing one of the nation’s first retrofit policies, promoting sustainable growth by encouraging commercial and residential buildings to be refurbished to the latest standards rather than demolished and replaced with new ones. 

“The policy supports the great work the real estate industry has done to understand how to repurpose buildings to be eco-friendly and attractive to investors, office-workers and people looking for a new home.”

The new City Plan has also identified four brownfield sites in Westminster which have been judged suitable for mixed-use developments, St Mary’s Hospital, Westbourne Park Bus Garage, Land adjacent to Royal Oak and Grosvenor Sidings.

The council said these sites had been identified as areas where development can make better use of land, support key infrastructure, create jobs, welcome new homes, and improve the public realm. 

> Also read: High Court overturns Gove’s decision to reject M&S’s Oxford Street plans

> Also read: What does the High Court’s ruling mean for M&S’ Oxford Street plans? Lawyers give their views

Meanwhile, separate proposals due to be rubber stamped this week would introduce higher carbon off-setting payments aiming to encourage developers to design more energy efficient schemes.

Payments are currently set at £95 per tonne of carbon in line with guidance set out in the capital-wide London Plan, but would rise to £330 per tonne for electric-based schemes and £880 per tonne for gas-based schemes under the changes.

Any funds generated will be spent on carbon-saving initiatives elsewhere in Westminster, contributing to meeting the council’s net zero targets.

The proposals for the new City Plan and the higher off-setting payments come after the High Court quashed the government’s decision to block plans by Marks & Spencer to demolish and rebuild its flagship store on Oxford Street.

The council approved the Pilbrow & Partners-designed plans in 2021 but Michael Gove called in the scheme and rejected the application following a public inquiry in 2022, a decision which the retailer successfully appealed last week.

M&S and local retail groups had strongly criticised Gove’s decision for creating a lack of clarity over planning policy towards redevelopment schemes.

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