What is required in a planning application for a new rural workers dwelling?
To make a planning application for a rural workers dwelling (either temporary or permanent) an agricultural or equestrian appraisal needs to be submitted to support the application along with an application form, plans/drawings and potentially other documents depending on your local planning authority.
What is an agricultural or equestrian appraisal?
An agricultural or equestrian appraisal reviews the business with the aim of achieving the two key tests: the functional test and the financial test.
What is the functional test?
The functional test assesses the requirement to live onsite within sight and sound of the farmyard all year round.
The most common reasons are animal welfare and security. For example, a dairy farm with all year-round calving requires regular monitoring and being on hand to assist. Often, however, on a sheep farm, lambing in the spring is not sufficient as the Local Planning Authority (LPA) may instead permit the siting of a temporary structure to cover the seasonal period.
This functional test is calculated using the Standard Man Days (SMD) system, which provides a general estimate of the labour requirement. One labour unit is assumed to work 2,200 hours per year or 275 Standard Man Days of eight hours per year – which most farmers probably only dream of working!
Each enterprise has industry standard figures for each sector. For example, a single suckled cow, including field work (silage, fertiliser, mucking spreading etc) and calf to weaning equates to 18 hours per cow per year – based on figures from the Agricultural Budgeting and Costing Book – May 2020.
An expert can help you with carrying out this test, and would need to know acreage and livestock numbers in order to do the necessary calculations.
What is the financial test?
The financial test appraises the viability of the business and ensures it is, or will be, achieving a sufficient profit long term.
For start-up businesses where a temporary dwelling (e.g. mobile home or log cabin) application is likely to be made initially, the focus will be on three years of financial forecasts, demonstrating the business growth year on year at a realistic rate. These are often produced by your accountant. A detailed breakdown of how each figure has been calculated is key.
Whereas, with an application for a permanent dwelling, the previous three years of audited accounts and a year or two of forward forecasts will be fundamental. A supporting letter from your accountant is also highly recommended.
In terms of financial soundness, an application must satisfy the LPA that the ongoing profitability of the business will sustain the worker living on site (based on the National Minimum Wage as a minimum) and fund the proposed dwelling. My general rule of thumb is that £20,000+ profit a year is the target. Then the funding for the proposed dwelling would be a separate matter to explore.
Seek advice on a planning application for a new rural workers dwelling
It is important to look at the two tests in conjunction as an enterprise may be profitable but fail to meet the SMD requirement or vice-versa. In conclusion, early collaboration between your land agent and accountant to assess these tests is key to increase your chances of a successful application for a rural worker dwelling.