Planning matters

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.