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.
28 Nov 2017
Monday saw the long-awaited launch of the government’s Industrial Strategy. But you have to have some sympathy for Business Secretary Greg Clark – by mid-morning the headline writers had become somewhat distracted by news of a certain royal engagement. That’s a shame, because the Strategy is intended to be one of the government’s flagship policy initiatives and rightly deserves attention.
Further analysis of the Strategy’s key implications will follow from Lichfields, but in the meantime, here are 10 of its highlights:
It’s a long document, some 130 pages, as long as the consultation Green Paper which preceded it earlier this year. Whilst it contains an overview section of sorts, you wonder whether a punchy executive summary version might have been helpful to distil the essence of what the government is seeking to achieve and to help reach the widest audience. It was also accompanied by a set of other useful policy papers and analysis, including a review of the Catapult Network programme.
It is unashamedly an “industrial strategy”, a term which had until recently fallen out of fashion. The perceived failures of previous industrial strategies (recall DeLorean?) have lingered long in Whitehall’s collective memory. More recently, Vince Cable reintroduced the concept during his tenure as Secretary of State for Business, Innovation and Skills within the Coalition government. However, from very early on in her premiership, Theresa May had called for a “proper industrial strategy” to deal with the challenges of low productivity, regional disparities and, of course, Brexit.
The “10 pillars” set out in the Green Paper are now the “5 foundations”: ideas; people; infrastructure; business; and places. If the concepts are broadly similar, the rationalisation is probably helpful. It may also be that someone has dusted down HM Treasury’s five drivers of productivity framework that was widely applied in the 2000s, which is perhaps not surprising given that improving productivity is a core aim of the Strategy.
An independent Industrial Strategy Council will be established, comprised of investors, economists and academics from across the UK. This will operate alongside the Economy and Industrial Strategy Cabinet Committee, chaired by the Prime Minister, which will remain responsible for driving delivery across government. There is a real sense that government wants the Strategy to cut across all government departments – something recently advocated by Michael Heseltine – and shape policy-making at all levels.
It adds detail to some of the announcements trailed in last week’s Budget – see the Lichfields’ summary – for example the Transforming Cities Fund, further devolution deals and the Oxfordshire housing deal. It confirms how important the Industrial Strategy is intended to be in the policy hierarchy and as an agenda which binds together all of the government’s various initiatives to support economic growth across the UK - from funding to devolution to skills.
The Strategy avoids “picking winners” – rejected as part of the Green Paper – but does set out a clear agenda around sector deals, which act as partnerships between the government and industry on sector-specific issues and funding settlements. Just four are agreed (artificial intelligence, automotive, life sciences and construction), while others are in the works (creative, manufacturing and nuclear), and the challenge is there for other sectors to follow.
Local industrial strategies are now a defined deliverable to be brought forward by local enterprise partnerships and mayoral Combined Authorities. These are to be agreed with government, with the first to appear by March 2019 (anything else happening that month?). Areas with potential to drive wider regional growth, focusing on clusters of expertise and centres of economic activity, will be prioritised. Existing strategic economic plans and local economic strategies may need to be reframed or refreshed.
There’s some important detail in the Strategy. For example, there are indications that the government will broaden appraisal methodologies to ensure the full potential for infrastructure to support local economies over the long-term is given weight in decision-making. It also introduces a ‘rebalancing toolkit’ to improve the focus, quality and transparency of ‘rebalancing’ evidence in strategic business cases, particularly to support high value transport investments in less productive parts of the UK. I’ve recently experienced first-hand the importance of making the evidential case for just this type of infrastructure project.
There’s more specific recognition of the role of housing delivery in supporting the growth of local economies, something widely identified in consultation responses to the Green Paper. Interestingly, housing has already accounted for nearly 40% of National Productivity Investment Fund allocations made to date. The government reiterates that it wants to support places with ambitious and innovative plans to build additional homes where they are needed, and which will support wider economic growth.
There’s not much reference specifically to planning, other than in relation to housing delivery. That might be a missed opportunity, as after all, local planning authorities are also charged with meeting the needs of modern businesses and their supply chains, particularly where local advantages exist (albeit these are not always well understood). It will be interesting to see if government takes the opportunity to bring the Industrial Strategy firmly into the planning lexicon as part of the draft revised National Planning Policy Framework expected in Spring 2018.
There’s much else to consider and reflect on; watch this space for further analysis from Lichfields on the Strategy’s key implications.