Planning matters

Against the backdrop of a challenging economic outlook, declining state of public finances and growing global geopolitical uncertainty, the Chancellor of the Exchequer’s Spring Statement 2025 was an important opportunity for the government to demonstrate a firm handle on the economy and a credible plan for delivering their “number one mission” for growth.

Having previously downgraded it to a ‘spring forecast’, the rapidly changing global context since the Budget was delivered last Autumn meant that Rachel Reeves’ speech in the House of Commons on Wednesday became much more significant.

As widely anticipated, the latest forecasts from the Office for Budget Responsibility (OBR) have downgraded UK economic growth to just 1.0% during 2025, which is half the rate expected back at the time of the Autumn Budget. Growth is then forecast to increase to 1.9% during 2026 and has been upgraded slightly in cumulative terms across the forecast period to Q1 2030.

Amidst the various cross-cutting spending cuts confirmed by the Chancellor, there were no ‘new’ announcements or funding commitments specifically in relation to planning and development.

Nevertheless, the Chancellor was keen to emphasise government’s “serious plan for growth”, citing some of the recent announcements already made to boost the economy including support for a third runway at Heathrow airport and £2 billion of grant funding to deliver up to 18,000 new social and affordable homes[1].

This follows the granting of development consent by the Secretary of State on Tuesday for the Lower Thames Crossing, and allocation of £600 million worth of investment to train up to 60,000 more skilled construction workers to help achieve government’s target to build 1.5 million homes in England by the end of this Parliament.

Planning reform was reiterated as being key to achieving this plan for growth, with the government’s flagship Planning and Infrastructure Bill having passed its second reading in the House of Commons on Monday.

The Chancellor was delighted to share the OBR’s conclusion that the planning reforms included in the updated (December 2024) National Planning Policy Framework (NPPF) will lead to 170,000 additional homes being built over the forecast period (i.e. to 2029-30), in turn increasing the level of real GDP by 0.2% and adding £6.8 billion to the economy (in today’s prices)[2].

This reflects the biggest positive real GDP effect that the OBR has ever reflected in its forecast for a policy with no fiscal cost. More explicitly, it shows that changes to the planning system have the potential to play a major role in driving economic growth if they can be implemented effectively.

In cumulative terms, the OBR expects net additions to the UK housing stock will amount to 1.3 million from 2025-26 to 2029-30, reaching 305,000 a year by 2029-30 (as shown in Figure 1 below).

 

This would see housebuilding reach its highest level in over 40 years and put the government within “touching distance” of achieving its manifesto promise of 1.5 million new homes by the end of this Parliament (albeit the 1.5 million target relates to England only, so in reality the ‘shortfall’ could be more significant).

 

The Spring Statement was an obvious opportunity to back these planning reforms with specific measures to kick start economic activity and move the focus beyond house building. We are still awaiting the government’s full Industrial Strategy (following publication of the Green Paper ‘Invest 2035’ in October 2024) which will set out a 10-year plan for investing in the high growth sectors that will drive government’s growth mission. This is due to be published in ‘Spring 2025’, alongside Sector Plans for eight growth-driving sectors and aligned with the multi-year Spending Review. 

 

In advance of this, the Chancellor set out a series of initiatives and funding commitments to boost Britain’s defence industry as way of achieving economic growth alongside maintaining national security.  In particular, leveraging the additional £2.2 billion defence spending announced in the Spring Statement to invest in defence technology and innovation.

This includes establishing UK Defence Innovation (UKDI) to enable innovative technology to rapidly progress from idea to the front line to secure competitive advantage and wider economic spillovers.

A new Defence Growth Board, co-chaired by the Chancellor and Defence Secretary, aims to put defence ‘at the heart of the UK’s modern Industrial Strategy’, as the country develops its credentials as a “defence industrial superpower” armed with the skills, jobs and economic opportunities to strengthen the UK and drive economic growth.

Specific growth and investment locations were identified in the Spring Statement including the Cumbrian town of Barrow-in-Furness (home to defence giant BAE Systems), alongside a commitment to regenerate and secure the future of Portsmouth Naval Base. Given that defence spending has historically focused on south western and south eastern parts of the country (as shown on the interactive map below), the government will need to carefully consider how this top-down investment into defence priorities can deliver economic growth and opportunity for all parts of the country.

 

Defence is rightly highlighted in Invest 2035 but represents just one of its eight priority growth sectors[3]. The country’s business communities are eager to learn more about the government’s plans for them all.  Similarly, local authorities including proposed Strategic Authorities are anxious to understand their role and priorities in enabling the sectors to grow. Whilst it is understandable for the Chancellor to emphasise that “the world has changed”, we suspect that the apparent delay to the publication of the final Industrial Strategy and associated Sector Plans relates to the disappearing prospect of sufficient fiscal headroom needed to stimulate investment anytime soon.   

The sector-focused approach is positive, logical and meaningful in economic policy terms.  However, if the government genuinely intends to ‘tackle barriers to growth’ and ‘create the right conditions for increased investment and higher quality jobs’, public sector capital will be required. Taking the creative industries as an example, it would be revealing to see how much investment is required simply to keep existing regionally and nationally important cultural assets operational and economically productive (not unlike the country’s tired and under-invested infrastructure system – from potholes to ubiquitous water leaks). This is before consideration is given to the capital support required, for example, to ensure affordable workspace is available for new creative enterprises throughout our cities, skills programme put in place to deliver the modern workforce needed for growing sectors or targeted funding gaps filled to ensure the next generation of theatres, arts and music venues can be realised.     

Whilst government borrowing may provide an element of the investment required in the short-term, the growth community will need to be patient. In the meantime, the government should continue to make best use of the policy levers it has at its disposal to release latent private sector capital investment. Planning reform coupled with a direct relationship to economic development policy is probably one of the most potent tools available to government in a constrained economy. In anticipation of an industrial strategy with any teeth, the planning reform focus must move well beyond house building and start to address how it can be effective in enabling various forms of commercial, industrial, creative and other types of development which can collectively kick start economic growth. 

 

The Planning (Scotland) Act 2019 and associated secondary legislation have brought in a number of new requirements for planning authorities bringing forward ‘new-style’ Local Development Plans (LDPs), most notably the introduction of ‘Evidence Reports’ and their scrutiny at a ‘Gate Check’.

The purpose of the Evidence Report is to set out the planning authority’s interpretation of its baseline evidence base, and the implications for the preparation of its LDP. In turn, the Gate Check, carried out by a Planning and Environmental Appeals Division (DPEA) Reporter, makes an independent judgement of whether the evidence report contains ‘sufficient information’ to inform the preparation of the LDP.

The overall intention of these two new requirements is to reduce the level of debate when the Proposed Plan is examined, and to make for a better, more evidence-led plan. The expectation is that it should not be necessary for the sufficiency of evidence base to be revisited at the examination stage.

At the time of writing, six Gate Checks have concluded, with an additional three ongoing (including Glasgow City Council’s resubmission). Whilst it remains to be seen whether the new process will have the desired effect of streamlined examinations and high quality plans, the decisions taken by Reporters to date are providing a better picture of what is required to prepare an insightful Evidence Report and successfully pass the Gate Check.

So what have we learned so far?

From the Notices of Sufficiency (the document provided by the Reporter where the Evidence Report has been deemed to have been acceptable) published to date, it is clear that Reporters are using the Gate Check to get under the skin of the evidence provided, and are picking up minor gaps, inconsistencies or issues to consider further in a constructive way.

However, planning authorities aren’t expected to have all the answers at this stage. Reporters are using the opportunity to highlight remaining uncertainty or the need for clarification to secure alignment with Scottish Government guidance, often in the form of advisories to be considered in preparing the plan. In many ways, this is to be expected – the rationale for bringing in this stage early in the plan making process was to allow independent scrutiny of the key principles of a draft LDP early enough in the preparation procedure for remedial action to be taken if flaws are uncovered.

For their part, authorities are also being encouraged to identify in their Evidence Reports any potential gaps in the evidence gathered or uncertainty in data, and to highlight areas where stakeholders disagree with the evidence.

Whilst the Evidence Report is largely focused on the baseline information available for plan makers to use to inform their plan, it is not enough to simply state what is known – Reporters are looking to understand the planning authority’s interpretation of what the evidence means for the LDP and Delivery Programme. Indeed, one of the reasons for the Reporter’s return of the Evidence Report to Fife Council (therefore not allowing them to go forward in preparing their plan) was that the Report did not establish what the evidence meant for the plan.

The minimum evidential requirements for Evidence Reports have not been defined by the Scottish Government; their guidance provides flexibility for proportionate professional judgment about what type and amount of evidence is sufficient. However, given the experience of the early submitters, Fife Council and Glasgow Council, in failing to progress to plan preparation stage first time (and being criticised for not going far enough on some topics) it would not be surprising if subsequent authorities choose to include more in their Evidence Reports to manage the risk of being found non-sufficient.  

The Scottish Government – as further clarified in a Chief Planner letter in June 2024 – expects LDPs to take an ‘ambitious approach’ to local housing land requirements (LHLR), setting figures that exceed the Minimum All-Tenure Housing Land Requirement (MATHLR) provided through NPF4. Gate Checks have become the arena in which this ‘ambitious approach’ is being scrutinised.

Both Fife Council and Glasgow Council were found not to have provided a transparent and understandable explanation of how the indicative LHLR has been arrived at, nor to have fully meet the requirements of national policy and guidance. In both cases, the Reporters set out revisions required to provide a more robust, transparent and easily understood explanation of how and why the evidence set out in the evidence report has been used to set the indicative LHLR.

That being said, what it means to have taken an ‘ambitious approach’ does not appear to have been settled on. Whilst some authorities have set arrived on an LHLR that is materially above MATHLR, Midlothian Council successfully argued for a LHLR only one dwelling above the MATHLR, and its Evidence Report was found to be adequate. West Lothian Council has recently engaged on two options for LHLR: one close to its MATHLR figure; and a higher figure that would address a wider definition of existing need. It will be interesting and informative to see which one the Council chooses to put forward when it submit its Evidence Report to the DPEA.

Scottish Government guidance states that the role of the Evidence Report is to establish what to plan for, with specific locations or sites being the focus of the later Proposed Plan stage. In turn, some planning authorities appear to be holding off undertaking call for sites exercises until after their Gate Check. For some of us, this seems like a lost opportunity – understanding potential development sites and their location can be a really important part of forming and testing a spatial vision for a place.

However, whilst sites themselves aren’t being considered as part of Gate Checks, planning authorities are often preparing site appraisal methodologies to submit, setting out how they propose to assess sites to inform plan allocations. It therefore remains important to engage with the Evidence Report to understand and shape these methodologies and to understand what is likely to be required to see sites be allocated.

Evidence of stakeholder engagement has been an important factor in the Gate Checks that have taken place to date. For example, the Reporter concluded that they were unable to conclude that Glasgow Council had sought the views of, and had regard to any views expressed by the key agencies, or had demonstrated a fully collaborative approach. They therefore concluded that they could not confirm that the Evidence Report was robust.

One of the intentions of the Gate Check is to streamline examination of plans. Guidance states that it should not be necessary for the Evidence Report or the sufficiency of the evidence base more generally to be revisited at the examination, which should instead focus on unresolved issues arising from the plan. The Gate Check process itself is not an examination – although the Reporter can request further written information or convene hearings if they conclude it is necessary – and so engagement at this stage should not be relied upon in order to shape the plan and its evidence base.

For this reason, it is also critical for those seeking to shape the plan to take the opportunity to engage with local authorities ahead of submission of Evidence Reports to the DPEA. Planning authorities are expected to undertake early and proactive engagement with stakeholders, to ensure collaborative and transparent evidence gathering, and to collate robust evidence. We have found that authorities are choosing to do this in different ways – some by providing a number of topic papers at the same time and asking for comments, and others holding a rolling process of engagement.  

Get in touch if you’d like to find out more about how we can support you in engaging with Evidence Reports and the plan-making process more generally.