The haunting conscience: NPPF reform and Commercial Development
Factory 2050 in Sheffield
Our summer holidays, like that of several others in the property industry, was punctured by working out our response to the proposed reforms to the National Planning Policy Framework (“NPPF”). Whilst most of the debate following its announcement in early August has focused on either its ability to increase housing delivery or on proposed development in the grey belt (definition still awaited!), we’re instead focused on the poorer relation - what the reforms mean for commercial development.
We’re ultimately interested in whether it fosters two essential elements of a more productive national economy: the ability to agglomerate clusters of industry in the regions in attempting to reorientate the national economy to become export-led; and whether these reforms can help accelerate the delivery of major pieces of infrastructure that are essential for the future - in particular data centres, gigafactories and renewable energy sources.
It’s beginning to and back again: the importance and form of the NPPF
Back to the beginning. For all you non-planners, the National Planning Policy Framework (NPPF) sets out the government’s planning policies for England and how these are expected to be applied at a local level.
The vast majority of new commercial developments therefore originate due to their ‘sponsorship’ as allocations within Local Plans - documents that, in theory, should be regularly updated by local planning authorities to guide where residential and commercial development takes place within that particular geography. Whilst a small number of developments of significance are directly determined by Central Government through the Nationally Significant Infrastructure Programme regime, the vast majority of commercial developments are allocated and determined at local authority level. The Local Plan ultimately remains the cornerstone of the planning system as guided by the NPPF.
The NPPF has come under significant criticism in recent years, in particular the sheer amount of pointless tinkering of the system by the previous Government for political ends; as my old gaffer Owen Michaelson used to point out to civil servants, “every time you make a change at national level it takes two years for those changes to take hold at the local level….reform wisely.” Our view is that NPPF reform is now necessary however; the deleterious amendments made over the past two years has directly affected confidence within the planning system, with a significant number of Local Plans stalled as a result. It is undoubtedly one of the factors behind both the UK’s sluggish economic growth and the cratering of new home delivery, shown in the Government’s own statistics:
In the year to 31 March 2024, new build dwelling starts in England were estimated to be 134,780, a 22% decrease when compared to the year to 31 March 2023.
We should point out again though that not all issues with the planning system stem from the NPPF. As our previous reports show, the political decision to defund local authorities to perform what are statutory functions over the last fifteen years, including the preparation of plans and the determination of applications, will be viewed as an historical disgrace; similarly, the lack of robust training nationally for those on Planning Committees, and the inability of some Councillors to look beyond their own selfish interests, cannot be influenced by frameworks.
The new Government has done the right thing though in beginning with what it can directly influence…..so let’s have a look at these changes with specific reference to commercial development.
NPPF reform and commercial development: the proposals
On 31 July 2024, the government put out to consultation a series of proposals for revisions to the NPPF, with the consultation period ending on 24 September 2024 - slap bang in the middle of the Labour Party conference…..
The intended focus of the proposals is on boosting the national supply of housing and other development needs - with several of the changes reverse amendments to the NPPF which were introduced by the previous government in December 2023.
For a full run down of what’s in the reforms, read the imperious Zack Simons planoraks blog here. Amongst several morsels, it’s worth reflecting on this sage bit of analysis:
So. There are 12 quick hits. Will all of this work? Heavens knows. This NPPF will, in the end, be only one piece - and an early piece - in a much more complicated policy and statutory puzzle over the coming years which includes e.g. new towns, strategic planning and other things.
We’ll be visiting that ‘strategic planning’ conundrum later…..
Within the proposed reforms, there are two main sections that relate to commercial development and key future infrastructure as follows:
Commercial development
The changes proposed state that LPAs should identify appropriate sites for commercial development “which meet the needs of a modern economy.” The government places particular emphasis on new commercial facilities that are adapted to the needs of a modern economy, including suitable locations for laboratories, gigafactories, data centres, digital infrastructure, freight and logistics.
Renewable energy
The consultation proposes that onshore wind is re-integrated into the Nationally Significant Infrastructure Programme regime and to set the threshold at which onshore wind projects are determined as nationally significant at 100 megawatts; and increase the same threshold for solar projects to 150 megawatts.
Local Planning Authorities will also be expected to actively “identify suitable areas for renewable and low carbon energy sources, and supporting infrastructure, where this would help secure their development” instead of the previous wording which was to “consider identifying.” Furthermore, it says decision makers should give “significant weight” to a proposal’s contribution to renewable energy generation and a net zero future.
THE REFORMS COME FROM THE RIGHT PLACE…
These intended reforms are a good first shot across the bows and in our view, are the minimum that is required. Of particular note:
We’re delighted that freight has made it in there as a prelude to the Government committing support for any future wave of Strategic Rail Freight Interchanges, as we’ve previously referenced; any move towards export rebalancing must have this approach within it.
Hooray for renewables and the return of onshore wind! You cannot even consider ‘net zero’ without renewables - yet the planning system in its present form has both acted as an inhibitor for investment AND kicked decision-making away from where it ought to be: the local level. That man Mr Simons again:
Which would mean lots more proposals for renewables coming through the now town and country planning system (rather than the DCO process under the Planning Act 2008) which has ironically become both a quicker and cheaper route.
(NB. For those interested in offshore wind, have a look at the results of the Government’s recent Renewables Auction, supporting 131 new schemes to be brought forward, here.)
It’s not a completely clean bill of health however.
That list of ‘commercial development’ types is a bit too prescriptive and exclusionary for our liking. Given Councils contain economic development functions with a phalanx of economic assessment data (now being used to inform recently announced Regional Growth Plans), the guidance really ought to refer to economic development that is already identified by that local planning authority within its published documents as strategically significant to that area. We think the NPPF should have a role in tying these threads together.
Local authorities and combined authorities have also set clear net-zero targets - reference Leeds’ extremely challenging target here. The imposition of MW thresholds for larger schemes however encourages them to be passengers in a process in which they need to play a leading and active role. Without this, you have local fist shaking to the sky, as per one of our least favourite political figures in recent years here. In short - remove the limits.
If you really want to create ‘clusters’ of economic significance to rebalance the national economy however, none of this really works without strategic planning - what we’ve previously called ‘the missing middle’ of the system and something that’s been off the menu since the abolition of Regional Spatial Strategies in 2010. This in itself requires a Government workstream of its own away from the NPPF, as we’ll run through later…..
….BUT THEY CANNOT DELIVER WHAT’S REQUIRED ON THEIR OWN
Let’s be realistic though - simply changing the NPPF will not reform nor hugely improve the system on its own to provide the development the UK needs. Aside from strategic planning, we’re most interested in two other key areas where further reform is needed.
SOAP BOX TIME. These reforms assume that the capacity within Local Government is there to rapidly enact changes. It isn’t. We wrote this in our last report on the challenges facing all local authorities:
All the while, there are major social infrastructure issues bubbling under. The elimination of the Revenue Support Grant for local authorities over the past fourteen years, matched with a surge in demand for what would traditionally be known as ‘social services’, has led to the local government sector taking on additional borrowing of £50bn over the last decade – and 25 authorities now have more than £1bn of borrowing, as shown here. You cannot have strong local growth whilst not properly supporting these institutions - and with 20 authorities also pitching a plea to be supported to deliver new Council Housing as part of the Government’s desire to build 1.5m homes this Parliament, something has to give.
I wince uncontrollably every time I read something along the lines of a ‘planning super squad’ being used as a sticking plaster for planning capacity in areas of high political interest and intrigue; a Gove-era idea clearly stolen from The Thick of It. Repeat after me: ideas like this are no replacement for a proper long-term FINANCIAL SETTLEMENT for local government. It may not be an immediate vote winner and would likely require tax rises, but we think it is absolutely essential for the UK’s economic health. If you disagree, go back to ‘Go’ and do not collect £200.
WHAT ABOUT THE LOCAL MEMBERS? The system relies on Councillors within Planning Committees often weighing up complex technical, local, moral (?) and political (of course!) choices in casting their votes for, against or abstaining on planning decisions. Planning reforms suggested thus far have been oddly silent, something which wiser heads than me have picked up on over the past few weeks.
What to do? We’ve previously called for some form of nationally sponsored programme for all Planning Committee members to receive statutory training, similar to what PAS provide here; without it, Councils risk unseemly discussions that do nothing for the confidence of the system, as per this example. Will it happen? Unlikely - but we’ll keep calling for it.
THE IMPORTANCE OF STRATEGIC PLANNING
If you take anything from this report, read more on the role of Strategic Planning to make the planning system work better. Fellow Human League fan Catriona Riddell has often fought a one woman rear guard action in defending its corner in recent years and she deserves enormous credit for rounding up a merry band of supporters, properly bringing it to Government attention and (now) actively working with Ministers and civil servants to guide its re-introduction.
To gauge its importance to commercial development, consider its basis:
Strategic planning is widely understood as the co-ordination of activity across wide geographical areas like city-regions, and across multiple sectors including housing, transport, health and the environment (RTPI, 2023). The potential value of strategic planning practice has been recognised and provided for in institutional form (such as in Structure Plans, Regional Planning Conferences, Regional Planning Guidance, Regional Spatial Strategies) by every UK Government between the late 1960s and 2010 as an essential part of the planning system. In May 2010, the incoming Government (Conservative and Liberal Democrat Coalition) signalled its intent to abolish Regional Spatial Strategies in England, and with it this longstanding principle of strategic planning at a greater than local planning authority level, and a principle which remains in much of Europe (Berisha et al 2021). Since then, there has been no mandatory requirement for a nation-wide approach to the production of strategic plans in England.
This lack of a nationwide approach has two noticeable effects: it reduces the quality and efficacy of the planning system; and it leads to poorer economic outcomes. Its reinstatement is an absolute must.
Catriona, the University of the West of England and Richard Wood have recently completed a thorough report on the subject entitled ‘Strategic Planning in England – Current Practice and Future Directions’, framed by a comprehensive research programme.
If there’s one further report you read as a result of this one, make sure it’s this; it clearly articulates:
a clear rationale for strategic spatial planning;
current approaches to strategic planning practice, identifying the successes and challenges and any barriers preventing the emergence of more collaborative approaches in the future; and
a series of potential reforms necessary to planning policy and practice to deliver more effective strategic spatial planning in the future.
We’re particularly interested to see if strategic planning is subsumed within the growing list of powers at Combined Authority level; we believe this makes sense given they also have a new responsibility to deliver local growth plans, as the West Midlands CA explains here. We think the two are interrelated - yet as the graphic below shows, hardly any plans are coming forward. Expect this to change as the clamour for strategic planning continues to increase.
Austin Allegro Powers: underpowered current activity on Strategic Planning at a regional level
YOU HAVE BUT UNDER THREE WEEKS TO RESPOND TO THESE INITIAL PROPOSALS
Consultation on NPPF reforms (and other planning changes) closes on the 24th of September. Get in touch with us to either make your case, or to discuss any parts of this report.
We anticipate however that this is just the first of several changes as the UK attempts to right itself from years of low productivity and poor housing delivery. About time - and we look forward to being part of it.