The first King’s Speech of this new Labour Government is an important ceremonial event, but it also offers us an insight as to how the Government plans to translate its manifesto into a legislative agenda.

As with the manifesto, and the Chancellor’s maiden speech, planning reform again took centre stage. This forms part of a consistent set of announcements proposing and then preparing a swift change in law and policy. The Labour manifesto invested significant prominence and political capital on reforming planning to meet an ambitious set of economic growth and housing goals. Within days of taking office, the Chancellor’s first speech reinforced this and made the case to link planning reform to the Government’s central mission to increase economic growth. The Kings Speech is the next milestone on this timeline and sets the legislative framework to get there. This will then be followed by the new NPPF, which is expected to be published for consultation by the end of July, with a view to it being in place by the ‘autumn’[1].

The Government’s primary mission is to boost economic growth and generate the resultant fiscal headroom. Alongside transport and infrastructure, planning has been identified as a key driver for growth. Throughout the election build up, Labour was clear that they were the ‘builders, not the blockers’ and the new legislative programme continues this theme. The King announced that the new Government “will get Britain building including through planning reform as they seek to accelerate the delivery of high-quality infrastructure and housing”.

In this blog we consider in detail two of the 39 Bills that were announced, both of which have particular relevance to our industry and clients: the Planning and Infrastructure Bill and the English Devolution Bill. We also briefly consider the National Wealth Fund Bill.

 

The Planning and Infrastructure Bill will seek to address concerns raised by the development sector – in some cases long held concerns that recent Conservative Governments were aware of, but did not have the political will to prioritise:

• slow planning application determination times and significant capacity issues within local planning authorities (LPAs);
   
• significant uncertainty as to whether an application will be successful or not, notwithstanding officer support, a local plan allocation and/or outline planning permission; and
   
• streamlining the development consent order process for major infrastructure.
   

And potentially:
 

• the stalling of the delivery of thousands of homes due to water and nutrient neutrality mitigation concerns

Also proposed is the reform of compulsory purchase compensation rules “to ensure that compensation paid to landowners is fair but not excessive where important social and physical infrastructure and affordable housing are being delivered”.

Other elements of the Planning and Infrastructure Bill include the commitment to “improving local planning decision making by modernising planning committees” and “increasing local planning authorities’ capacity to improve performance and decision making, providing a more predictable service to developers and investors”.

Labour has been vocal about its intentions to increase capacity in local planning authorities (LPAs) and it is clear that it recognises the challenges many local authorises face in resourcing their planning departments. As discussed in Ed Clarke’s blog Planning reform, the new Chancellor’s platform for growth, the Chancellor has already promised to support LPAs with funding for 300 additional planning officers across the UK. The announcements of intention to invest in LPAs builds on Labour’s manifesto pledges. James Fennell, Lichfields’ Chief Executive, blogged on capacity building earlier this year. His blog noted that the current system is under-valued and under-resourced and that whatever system we have in the future, it will only work if it is properly resourced.

Improving the resources of LPAs was something the last Government tried to address. The increase to planning fees which came into force in December 2023 and discussed in this Insight, was welcomed by many in the industry but was widely acknowledged as the first step to increasing the resources of LPAs, as funding shortfalls of around £160 million annually would still exist. It is clear that Labour will have to address the acute capacity issues in LPAs if it is serious about improving performance. They are certainly alive to the scale of the problem; the documents behind the King’s Speech give an estimated development management funding shortfall of £262 million per annum in 2022/23 (i.e. before the fee increases).

The role of planning committees has also recently been under the spotlight. The previous Government published a consultation on accelerating the planning system which included new performance metrics and monitoring mechanisms for planning committees.

The previous Secretary of State noted in a December 2023 Written Ministerial Statement, that the Planning Inspectorate would start reporting to the SoS the cases where an appeal is allowed following a planning committee refusing planning permission against the original officer’s recommendation. The intention of the previous Government was to build a picture of how frequently such appeals are allowed, because it considered that overturning of officer recommendations by planning committees should be a ‘rare and infrequent’ outcome. The former SoS also used the WMS to advise that he had reminded the Planning Inspectorate to consider awarding costs to appellants in such circumstances – so the tide was already starting to turn.

 

 

The Government proposes to improve the speed of Development Consent Order (DCO) decisions, which has slowed during the last three years in particular, by simplifying the process.

The desire to speed DCO decision-making is driven by concerns including the ability to provide energy security, meet net zero targets and remove constraints on economic growth.

In addition to simplification, the Government “will enable relevant, new and improved National Policy Statements (NPS) to come forward, establishing a review process that provides the opportunity for them to be updated every five years, giving increased certainty to developers and communities”.

Promise of a simplified consenting process for major infrastructure projects, alongside a review of the National Policy Statement (NPS) context for these proposals, is a familiar and welcome offer. How this will translate into changes to the process and how the scope and content of NPSs will change remains to be seen.  The development sector has called for changes to the system for some time. Lichfields Senior Director Hugh Scanlon notes that well-rehearsed themes for reform include:

 

The Government says that reforming compulsory purchase compensation rules will help unlock more development sites and enable more effective land assembly with particular reference to affordable housing delivery.

Some change to compulsory purchase order legislation was among the provisions within the Levelling Up and Regeneration Act that came into force under the last Government.  This included a provision to allow Homes England and councils using Compulsory Purchase Orders to apply to the Secretary to remove ‘hope value’, provided that the development would be in the public interest and provide affordable housing, health or educational uses.

This current Government says it will further reform CPO compensation rules “to ensure that compensation paid to landowners is fair but not excessive where important social and physical infrastructure and affordable housing are being delivered”.

Details are not provided, but (then Shadow) Housing Minister Matthew Pennycook said, in a 7 June 2024 interview with i newspaper (£) and associated video interview (skip to 1:00), that “when development takes place a huge part of the pressure of development is the cost of land so we have got to make further changes to CPO to ensure the market price of land when we're assembling and bringing forward development is based on a fair price […] so we want a range of public bodies to be able to use them. At the moment there is a discretionary power which certain public bodies can use if they come and say to the Secretary of State please please approve this site. That's an extra layer of planning permission like that slows down the system so we want a range of public bodies to have the certainty of being able to use this specific power so that we can get more development across the country going”.

Some of the most pressing challenges to CPO reform are covered in Matthew Spry’s blog Abandon all hope, ye who enter here, which was published in June 2023, when this idea was first mooted by Labour. The challenges Matthew identifies include the risk of introducing a two-tier land market, of providing the powers to all local authorities, and the potential hiatus effect to bringing forward developable land.

 

The Government says it will use development “to fund nature recovery where currently both are stalled, unlocking a win-win outcome for the economy and for nature, because we know we can do better than the status quo”.

We believe that this is a reference to sites that have been stalled by concerns relating to water and nutrient neutrality, particularly with regard to the impact of housing development on water quantity and quality. As was widely reported in the property press, the Labour party opposed a proposed Conservative party amendment to the Levelling Up and Regeneration Bill (as it was), which was intended to navigate a solution to these matters. At that time, in September 2023, the Deputy Prime Minister (DPM), in her then Shadow Housing Secretary role, co-authored a September 2023 article in The Times (£) with the Environment Secretary (then Shadow), Steve Reed “Plan to ease river pollution rules is reckless and Labour will block it”. In this article, they said that the Conservatives’ approach was “deeply problematic” and “would allow councils to ignore environmental regulations and authorise new housing development without mitigation”. The article also claimed that it  would “fatally undermine the emerging market in nutrient pollution reduction that developers are already making use of”. They suggested that an alternative approach would be to use negatively worded Grampian conditions so that work could at least start while mitigation schemes had time to “bed-in”.

It remains the case that thousands of homes are at present stalled due to water and nutrient neutrality concerns.

The detail of how this might be addressed through legislation will be key. However, the Government is clear that it will consult with key stakeholders this summer and legislation will follow only where it will deliver positive environmental outcomes.

What the now Housing and Environment Secretaries said in their September 2023 Times article (see above) gives an indication of what will be under scrutiny in those discussions:

On 20 July 2024, the DPM and the Environment Secretary wrote to environmental non-governmental organisations about working with them in the coming months - they acknowledged that the Government has committed both to deliver housing and infrastructure and to deliver for nature. The letter refers to environmental assessments, as well as the mitigation measures sought in respect of new development, suggesting wide ranging discussions are anticipated:

Lichfields Senior Director, Simon Coop, has been monitoring this matter for clients since its emergence:

The English Devolution Bill (previously termed the “Take Back Control Bill” on the campaign trail) forms part of the legislative programme to establish a new framework for English devolution, with the aim to deepen and widen the devolution process. It offers a path to a new devolution framework and plans for changes to governance structures.

  

The mention of “improving and unblocking local decision making through more effective governance arrangements” in the supporting documents to the King’s Speech highlights a potential re-work of the previous Government’s devolution framework, set out as policy in the 2022 Levelling up and Regeneration White Paper. That framework set out governance arrangements for devolution over three levels, but it was updated in March 2024 to include a fourth level. The existing devolution framework is therefore broadly as follows:

The new Government has expressed its desire to install a “more ambitious standardised devolution framework into legislation”. This may draw on work already done as part of ‘trailblazer’ deals with the Greater Manchester Combined Authority and the West Midlands Combined Authority around level 4 devolution deals which included, for example, the potential for combined authorities to have strategic control in any future Affordable Homes Programme from 2026.

With regards to strategic planning, the Spatial Development Strategies that are already in place in Birmingham and Manchester would likely be the model for further devolution deals rather than the London Plan model which sets the strategic direction but cannot allocate land. These changes would work with the grain of the previous Government, with regards to the trailblazer deals.

It will be essential that those devising strategic plans carefully consideration to how they can be introduced without adding delay to a system already plagued by delay. While some might take the view that short term pain is worth the long term potential gain of having a strategic layer, the lessons learned by others who have worked on larger-than-local plans must be applied.

 

The Bill pledges to make “it easier to provide devolved powers quickly to more areas through establishing a simpler process for creating new Combined and Combined County Authorities, to ensure that every part of England can rapidly benefit from devolution. The Bill will establish a legislative foundation upon which to widen and deepen devolution, with a weighting towards creating advanced mayoral settlements where there is the capacity and ambition to do so”.

The new Government has detailed its plans to “make devolution the default setting.”  The Deputy Prime Minister’s “devolution revolution” letter[2] has pledged to roll out the offer to all local leaders without a devolution deal in place. The pledge to “make devolution the default setting”, demonstrates the new Government’s direction of travel in this regard.

By making devolution the default setting, this Bill proposes to grant powers locally without the need to negotiate agreements where they meet the governance conditions. Local leaders will be able to formally request additional powers as set out in the revised devolution framework and the Government will be required to consider the request and either devolve them or publicly explain their reasons for not doing so.

It will be crucial to see the aims for “widening” and “deepening” in tandem with the detail that emerges from the revised devolution framework to understand which powers could be devolved to which areas.

 

The Bill makes clear it aims to “strengthen mayoral powers” especially with regards to decision-making for improving economic growth, through more effective governance arrangements.  Effective and robust governance arrangements will be key to the credibility of decision makers and the ability to devolve more powers to an accountable body. However, there is also an inherent trade-off between more levels of scrutiny and the ability for a Mayor to drive forward change. Therefore, addressing appropriate governance arrangements in conjunction with the devolution framework will also be key to its success.

Local and sub-regional decision making is of fundamental importance to the enabling of economic growth and accordingly the thrust of the Devolution Bill is to be supported. We consider it essential that:

• New powers for groups of local authorities to develop spatial and other forms of strategic economic development plans should be used to identify regionally and nationally important investment sites, prioritise locations for the growth of priority sector clusters and identify strategic infrastructure requirements;
   
• Local Growth Plans and other plans are founded on local authorities being given a statutory economic development function as advocated by the Institute for Economic Development; and,
   
• There is an immediate a presumption in favour of development for economic uses where there is no up-to-date local plan in place.

 

There is also a mention that the English Devolution Bill will include within it a new ‘right to buy’ for community assets, to support the regeneration of high streets and end the “blight of empty premises”[3].

In addition, the Prime Minister spoke during the 2024 Local Government election campaign about the role that he believes local Mayors will have in rejuvenating high streets[4] once afforded greater devolution powers.

Rejuvenating the High Street has been a hot and widely supported topic for some time, reflected in the Conservative Government’s High Street Auctions proposals (that it had intended to be in force this summer) and High Streets (Designation, Review and Improvement Plan) Bill, which enjoyed cross party support before it fell away on the prorogation of Parliament in May.

Lichfields’ Chair, Jonathan Wallace, presented the challenges facing the High Street in a recent Guardian article “How town centres are recovering from the fall of Debenhams”. Jonathan also co-authored the Lichfields’ blog that considered the High Streets (Designation, Review and Improvement Plan) Bill, in which he and Daniel Gregg noted:

In addition changes to planning and governance, a Bill for a National Wealth Fund (NWF), with an additional £7.3 billion is intended to mobilise billions of pounds worth of additional private sector investment by making “transformative investments”.

Richard Coburn considers “Any priority sectors targeted by the Fund will need clear strategies and associated action plans, forming an integral part of the overall national industrial strategy. These sector plans should also have a strong spatial dimension supported, where relevant, by the identification of strategic investment sites in key locations for accelerated development”.

The King’s Speech has kept planning reform front and centre of the Government’s legislative agenda and ahead of matters such as health and education in the associated press releases (e.g. the Government's ten things to know).  This forms part of a coherent strand of Government announcements and policies that started even before the election. Together with anticipated imminent new policy, it is hoped this will kick start its mission for economic growth and housebuilding. As we have noted elsewhere, much of the most significant change required can be driven through without legislative change – with the NPPF clearly critical to the success of the government’s plans.

The issues to be addressed are not new and indeed the last Government was seeking to address many of them – but it was consistently knocked back by backbench Tory MPs.

The latest announcements provide a further statement of intent about the Government’s ambitions to promptly use all available levers to enact planning reform that drives growth. Over the coming weeks and months, much of the detail that the industry have called for will emerge across the consultation on NPPF reforms, the start of the new Parliament, and the party conference season. We share the Government's hopes this will create the certainty required to “get Britain Building”.