16 Mar 2018
The National Planning Policy Framework (NPPF), consulted on in 2011 and published in 2012, came as the UK economy was emerging from the deepest recession in a generation. Today, that period of recession continues to cast a long shadow in terms of impact on the public finances and productivity levels, and is now complicated by the economic uncertainties created by Brexit. In his Spring Statement earlier this week, the Chancellor Philip Hammond summed up that there is “light at the end of the tunnel”, but the latest Office for Budget Responsibility (OBR) forecasts point to a prolonged period of somewhat sluggish growth ahead (see Lichfields’ analysis).
In that context, the Government has chosen to make limited substantive change in terms of directing planning policy for the economy and business through its recently published draft NPPF. An “economic objective” remains the first overarching objective of the planning system (paragraph 8, point a). However, the wording has been broadened to expressly refer to the need to, “support growth, innovation and improved productivity” (emphasis added). Productivity is a concept rarely explored in any great detail in plan-making or decision-taking, but the added emphasis seems appropriate given the national imperative on the issue.
In line with the draft NPPF’s new structure, economic considerations (including the rural economy) now have their own chapter (6). In the current NPPF, “building a strong, competitive economy” is the first element of delivering sustainable development – tellingly, it now follows the chapter on delivering a sufficient supply of homes. In terms of content, however, the wording of the draft chapter looks familiar when compared to paragraphs 18-22 of the current NPPF. In line with the wider amendments to the current NPPF, the text has been reduced and simplified.
The widely-cited line that the planning system should do, “everything it can to support sustainable economic growth” (paragraph 21 of the current NPPF) disappears, but the general direction – and note the further reference to productivity – remains clear:
“Significant weight should be placed on the need to support economic growth and productivity, taking into account local business needs and wider opportunities for development.” (paragraph 82)
Also notable is the specific reference to the Government’s Industrial Strategy White Paper. This is not surprising, and is sensible; as written in an earlier blog, Government very much sees the Strategy as cutting across all areas of policy-making. In the same vein, planning policies should now have regard to Local Industrial Strategies (paragraph 83, point a). The Industrial Strategy, and how it is manifested locally, is therefore set to become more influential in plan-making and a potential material consideration. Local authorities and sub-regions will therefore want to be proactive in bringing forward Local Industrial Strategies not only to help realise growth opportunities in their area but also given the weight they might carry in making future planning decisions.
On employment land more specifically, the NPPF currently states that, “planning policies should avoid the long term protection of sites allocated for employment use where there is no reasonable prospect of a site being used for that purpose” (paragraph 22). This no longer appears in the economy chapter, but now features in expanded form in chapter 11 on “making effective use of land”. The sentiment is largely the same but the test has been sharpened: regular reviews of allocations are required and, even prior to plan reviews, applications for alternative uses should be supported where unmet needs for development could be provided for. Furthermore, in “areas of high housing demand”, the use of existing employment (and retail) land for homes is supported where this does not “undermine key economic sectors or sites”.
Taken overall, the draft NPPF looks very much like ‘business as usual’ when it comes to planning for the economy – there’s little in the way of new detail or prescription. As they start to come forward, Local Industrial Strategies will need to give consideration to how local plans can help deliver wider economic objectives, particularly improving productivity. The Government appears to view employment land as something of a sacrificial lamb in the quest to meet housing needs (in contrast with the much stronger policies to protect employment land proposed in the draft London Plan, as detailed in recent research by Lichfields). It’s also less clear how well the approach proposed nationally sits with the Government’s clearly stated intentions to support economic growth and productivity.
Ultimately, local authorities will need up-to-date and more comprehensive evidence to inform their judgments about the need for, and relative importance of, the employment land in their areas, particularly in the face of added pressure for release to other uses. Economic evidence looks set to remain key to planning decision-taking.
See our other blogs in this series:
National Planning Policy Framework review: what to expect?
Draft revised National Planning Policy Framework: a change in narrative
NPPF consultation proposals – what could they mean for town centres?
NPPF consultations – what could they mean for designers?
Draft NPPF: heritage policy is conserved…
Draft NPPF: implications for aviation?
Draft NPPF: more emphasis on healthy and safe communities
Lichfields will publish further analysis of the consultation on the draft revised NPPF and its implications. Click here to subscribe for updates.
By providing the essential investment to support and drive economic growth, we all know that the development industry makes a hugely important contribution to the UK economy. But relatively few organisations can point to specific evidence or tangible examples of the wider benefits delivered by their day-to-day activities and operations.
The concept of measuring the social and economic impacts of corporate activities has, however, started to attract greater focus and attention within the development sector. Leading organisations increasingly want to take a strategic perspective of the contribution they make to the national and local economy through their development portfolios and investments. Within a competitive and often crowded marketplace, they are coming to realise that to effectively influence stakeholders requires a clear and compelling narrative, justified by a robust and objective evidence base.
At Lichfields, we work with some of the largest and most successful companies in the sector including commercial developers, housebuilders, retailers and industry bodies, to help them assess their economic contribution.
Friday we were delighted to launch our most recent collaboration with Landsec, the UK’s largest listed commercial property company, having supported them to measure their sizeable contribution to the UK economy for the first time. The findings show Landsec’s annual contribution to the UK economy through buying, selling, building and managing commercial property.
But with so much to potentially cover and include, where’s the best place to start? I’ve set out some key questions for any organisation thinking about how to measure their contribution:
1) What’s the best way of analysing the value created by an organisation?
For large companies, there is often a case to break down activity by specific divisions or geographical trading areas. Some examples include:
Company-wide activity (e.g. Landsec’s UK operations);
Divisional (or regional) operations (e.g. Barratt David Wilson Southern Region);
A portfolio of sites, assets or developments (e.g. Manor Royal Business District);
Individual development schemes (e.g. Long Marston Airfield); and
Industry-wide activities (e.g. UK house building).
2) Who is the target audience and what are the key messages to convey?
This will determine the types of impacts and metrics to explore, as well as the outputs required. Once the added value generated by a business has been quantified, this can be applied in a number of contexts including corporate social responsibility reporting, communicating wider value to stakeholders (such as investors, local councils, government) and providing differentiation from competitors (for example within competitive bidding situations). This could focus on ‘real time’ impacts such as revenue generated for UK plc as well as longer term impacts such as investing in the workforce and local communities (e.g. supporting people to (re)enter the labour market).
3) What input data is available?
Think about what kind of data and information is already held in-house (for example on a company ledger or payroll) and what might need to be captured through primary data collection or surveys. For many of our clients when undertaking this exercise for the first time, this can help to shine a light on the type, scale and quality of a wide range of company data and often helps to improve and streamline internal systems going forward. In reality we find that it’s an evolving process, with the range of metrics reported expanding and diversifying over time. Our analytical framework is flexible and scalable, and draws on the latest data and national best practice to consider socio-economic contribution across a range of direct, indirect and wider impacts including creating jobs and expenditure, supporting public resources and services and building sustainable communities (Figure 1).
Figure 1: Socio-economic impact framework
This provides an opportunity to look beyond the obvious metrics (such as number of people directly employed by an organisation) to quantify the value supported across the wider supply chain and economy. For instance, the ‘catalytic’ and place-making role played by major developments, such as kick starting the regeneration of a town centre or unlocking a new piece of transport infrastructure to enhance connectivity and consequently enable an area to secure additional investment.
4) What is the most effective and impactful way of presenting the results?
This will partly depend on the intended audience, and it may be that a suite of different outputs are required. We have used our experience and polished suite of graphics tools to communicate key messages in a visually appealing way, through clear and user-friendly outputs such as infographic summaries, interactive tools and creative, engaging reports (some examples below).
What’s clear is that more of the development sector’s key players are realising the value that comes from measuring and communicating their total economic impact, and we expect to see a growing appetite over the coming months as government looks to secure new sector deals. At Lichfields we are well placed to help and simplify the process, drawing on our market-leading expertise and unparalleled track record of economic impact assessment, as well as our ‘tried and tested’ tools that have been independently reviewed and verified.
Please get in touch to find out more and to discuss how we can help.
Image credit: Loop Imaged Ltd / Alamy Stock Photo