Planning reforms and economic growth: will uncertainty hold us back?

Planning is indeed an important starting point in securing a prosperous economic future – from addressing the housing crisis through to supporting industry and infrastructure, as without the physical infrastructure little can be achieved.

I don’t question the ability of planning to deliver, but I have two major reservations in relation to Wednesday's announcement: firstly, even with the proposed reforms, is the planning system sufficiently unambiguous to enable such growth, and secondly, what next?

The consequences of change

Many politicians – Liz Truss springs to mind – refer to ‘cutting red tape’ to deliver much-needed change. But it is important to consider why the red tape exists - what is it intended to protect, and how will the system function in its absence?

For example, in introducing ‘devolution’ to push ‘strategic’ planning decisions up a tier, how will local communities react?  In using Simplified Planning Zones to fast-track planning applications for data centres and associated infrastructure, will the necessary scrutiny be lost?

Do the reforms go far enough?

It’s been encouraging to see large-scale energy infrastructure schemes progressed and reforms have also been successful on a smaller scale.

But until we see the content of the Planning and Infrastructure Bill and the new National Development Management Policies, and until we know the outcome of the various planning working papers and informal consultation exercises, there’s very little to comment on, let alone reassure us that Rachel Reave’s ‘further and faster’ growth ambitions will materialise.

Uncertainty remains

Despite many positives, the change in government has created considerable uncertainty for planning and development – from local authority planners, despite clarification remaining unsure of which version of the NPPF to base their local plans on, to developers concerned that while their likelihood of planning success may be increased, the actual implementation of those planning consents is wracked with uncertainty, not least financial viability and capacity within the supply chain.

Devolution – or not?

Both the English Devolution Bill and future Planning and Infrastructure Bill promise further devolution. We understand that responsibility for strategic planning is to be removed from a local level and bestowed at a higher (regional) level. But is this transfer of power upwards actually devolution? Likewise, the introduction of a suite of National Development Management Policies which local authorities will be required to adhere to, limiting the opportunity to address these issues on a local level.

Additionally, the geographical coverage of devolution appears unclear and potentially chaotic. The previous Labour government put in place Regional Spatial Strategies (RSSs) to oversee strategic planning, ensuring that coverage was universal. The regionally-led approach to devolution, on the other hand (whereby areas can determine whether they wish to form a combined authority) could lead to some local authorities falling between two regional bodies and retaining strategic planning powers at a local authority level. Clarification is urgently required on this if we are to restore a degree of certainty to both LPA and investor/developers.

Devolution (defined by the government as ‘decision making moved closer to the citizen’) would, ironically, have a greater presence in those local authorities who had retained the status quo, as opposed to those whose planning powers were transferred to a higher level.

The patchwork approach to devolution, which has not existed previously will also lead to an odd disparity of planning powers. Currently the London combined authority has planning powers; Manchester is in the process of acquiring planning powers, but other devolved assemblies will, initially at least, have less autonomy over planning matters. Will these powers sit at a national, or a local level?

Resourcing will remain an impediment

The government has promised funding for 300 additional planners. Irrespective of the fact that this would allow for less than 0.5 planner per local authority – and considerably less so if devolved bodies also require strategic planning expertise – it is not only planners that are required to enable development to take place.

At a local authority level alone, planning positively requires input from conservation officers, ecology officers and highways, to name a few. Beyond planning, development requires a huge range of skills, from construction workers to sales and marketing. In many circumstances, government support will be needed to ensure that the necessary skills are available.

The revised NPPF overlooked the elements of development that deliver economic growth

Given the rhetoric and headline grabbing to date it is perhaps hardly surprising that the changes to the NPPF largely concerned residential. But jobs and infrastructure are imperative not only to provide full-functioning communities, but to deliver on the aspiration of economic growth.

A change in planning policy for commercial and industrial development was notably missing from the revised NPPF but perhaps not a surprise. From a commercial development point of view, one of the few changes to the NPPF was the recognition that local plans must have regard to national industrial strategy (Invest 2035). Is this a nod towards strategic planning, and something we can expect to see more of in the Planning and Infrastructure Bill? It is widely appreciated that regional planning is by far the best means of enabling good industrial development, much of which operates at the national, regional, or subregional levels and this would certainly be welcomed.

Furthermore, it is surprising that ‘flexible workspace’ was dropped as an example of flexible working practices, given changing working patters. This is likely to be unpopular with those who advocate flexible working as part of a healthy work / life balance.

A need for strategic assessment of employment need

The government has put in place a target, and a new standard methodology, for the development of new homes. But homes are a single element of new communities.

We lack a standard methodology for assessing employment need. Simply observing trends is of little use bearing in mind the curveball that Covid has thrown at us: we cannot look at patterns that have emerged over the last decade because sectors are fast moving, particularly industrial and logistics, where policies need to be more agile.

Unlike housing, it’s more difficult to predict a target number for development of new spaces for employment, since employment use is so nuanced – by sector and by geography. We cannot rely on appeal decisions to determine the number of jobs that must be created through new employment spaces but in the absence of targets, important decisions will be taken by individual Inspectors.

AI growth zones

The government, in its AI Opportunities Action Plan published on 13 January, announced that the growth in AI will be supported by Simplified Planning Zones (AI Growth Zones or AIGZs) which will accelerate the build out of data centres and associated infrastructure.

This is a positive announcement. The further acknowledgement of the important role data centres will play in delivering growth is welcomed but we must ensure sufficient power (together with water supply for cooling) is available. 

Changes to judicial review of DCOs for NSIPs

The proposed changes to judicial review of Development Consent Order decisions for nationally significant infrastructure is also a step in the right direction.

Conclusion

Planning touches almost every part of the economy. Certainty is a prerequisite of growth and investor confidence, and yet currently uncertainly continues to exist at many levels. Economic uncertainty must be reversed or it will impede potential development despite greater clarity in the planning system.