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Logistics & the revised NPPF: Has it gone far enough?
The revised National Planning Policy Framework [NPPF] was published on 24 July 2018. The changes to the way that viability is considered and the introduction of the Housing Delivery Test have been hot topics over the past two weeks (and for months before that); but what about the logistics sector? This blog looks at some of the potential implications that the revised NPPF could have on logistics.   Strategic Thinking  The introduction of “employment” and “other commercial development” (paragraph 20) into the list of land uses for which strategic policies should set the pattern, scale, quality and make sufficient provision for, is welcome. This should be seen as a step in the right direction, particularly for employment development and should encourage some joined-up thinking by local planning authorities [LPAs], including for logistics. Paragraph 82 goes on to explain that policies and decisions should recognise and address the specific locational requirements of particular sectors, including “clusters or networks of knowledge and data-driven, creative or high technology industries; and for storage and distribution operations” (highlighting is Lichfields’ own). The specific mention of storage and distribution operations (that incidentally, were not included in the March draft) is long overdue and provides recognition of the recent growth in this sector. Indeed, to be one of only three sectors explicitly mentioned in the ‘Building a strong, competitive economy’ chapter is testament to the role that logistics could play in the future economy. This focus on strategic policies for logistics should encourage policy and decision makers to think more about the location of warehousing space. The location of distribution hubs has historically been led by the quality of the local highway network, and the distance to motorway hubs, rail freight terminals and ports. Whilst these are still key factors, the recent flurry of development of logistics buildings that has arisen because of a seismic shift in the way we shop (i.e. increased internet shopping) has resulted in the saturation of the workforce in some locations. This has caused prospective occupiers to undertake more detailed demographic analysis in areas where they are considering locating, to enable them to try and understand the quality of the existing and future workforce that would be available to them. Furthermore, the way that the last-mile of parcel delivery could evolve over the next few years i.e. through electrically powered e-vans, micro vehicles and e-cargo bikes which can provide a better delivery service to customers (in comparison to light commercial vehicles) could also have an impact on the way that logistics services operate, their scale and where they locate.    These are all factors that will impact on the location of future logistics and distribution hubs and will need to be properly interrogated throughout the development plan process.   But where will they live? The creation of jobs through the growth of businesses is an attractive proposition for many councils. There are examples across the country of LPAs that actively support economic development, particularly in logistics and distribution, where they are promoting hundreds of hectares of employment land through the development plan process. These employment hubs can create hundreds of jobs for local people and can attract job seekers from further afield. However, this workforce needs somewhere to live. Indeed, the revised NPPF recommends that planning policies should support a mix of uses on larger sites, with the aim of minimising the number and lengths of journeys to work (paragraph 104a). However, in some cases, there won’t be enough homes for the expanded workforce to live in, as LPA housing requirements might not align with higher, aspirational employment land targets. The revised NPPF does not help in this regard. Firstly, and as opposed to the standard methodology for the assessment of housing need, the revised NPPF does not include anything similar for the assessment of jobs and employment land. This means that each LPA can use its own methodology to derive a figure. This could be a ‘going for growth’ type of scenario; or a more modest ‘do nothing’ type scenario. Secondly, the standard methodology does not appear to properly consider employment growth. Indeed, the revised NPPF does not include the 2012 NPPF policy that LPAs should ensure that a plan’s housing and employment strategies are integrated (2012 NPPF paragraph 158). Whilst there is nothing stopping plan-makers from increasing their housing need by utilising different methods of assessing need; some LPAs aren’t keen on  increasing their housing numbers on a voluntary basis. And we have not yet seen any examples yet of how inspectors have considered an LPA’s use of a different approach. If LPAs want to aim for higher employment growth, national policy should refer to providing enough housing to sustainably support the number of jobs that developments will create. Employment and housing growth need to align, and that coordination seems to be missing from the latest iteration of the NPPF.   Parking, parking, parking  The revised NPPF includes a requirement for new and expanded distribution centres to make provision for sufficient lorry parking. Whilst this is nothing new in practice, the revised NPPF now expects policies and decisions to take into account any local shortages, to reduce the risk of parking in locations that lack proper facilities or could cause a nuisance. It is somewhat surprising that the NPPF finds space to highlight anti-social behaviour of lorry drivers, but in doing so, it does reflect a common local concern by those promoting new B8 schemes.  Whilst it doesn’t seem reasonable for new proposals to ‘over-provide’ on lorry parking to solve existing parking problems as a matter of course; there may be merit in B8 developers ‘over-providing’ on lorry parking to supplement a policy compliant provision (where schemes allow), as a benefit to the local community or to mitigate against other impacts. So, has it gone far enough? In a nutshell, probably not. Whilst we are moving in the right direction, and the introduction of strategic policies is welcome, the disconnect between the way that housing need is derived (the standard housing methodology) and employment land need is calculated, does not help create sustainable communities. There could be a situation (particularly in the northern regions) where housing numbers are pushed down due to the standard methodology, but the LPA concerned is ‘going for growth’ and planning for hundreds of thousands of square metres of logistics space. Where is the workforce going to live? There has to be a symbiotic relationship between objectively assessed housing and employment need. The government has almost adopted a ‘business as usual’ approach to logistics. Whilst producing a housing-focussed framework, a balanced approach is essential in creating truly sustainable development. Logistics developments play a huge role in our economy, enabling businesses to grow and creating jobs in local communities. The government needs to make sure that employment development is properly planned for and that we allow growth in the logistics sector to create opportunities for generations to come.

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Brexit – what could it mean for planning and development?
On 23 June the UK will have the opportunity to decide whether Britain should stay in, or leave the European Union.  No nation state has ever held a referendum on EU membership, or indeed left the political and economic partnership. Thus no precedent for the impact that an EU exit may have on the economy has been set, leaving around 15% of UK voters currently ‘undecided’[1].  The main arguments at the centre of the EU debate relate to immigration, sovereignty, trade, security, jobs and finance. Those wishing to leave the EU want to take control of British borders and reduce the number of immigrants coming into the country. They also feel that the EU imposes too much regulation and that Britain is being held back by its membership. The ‘In’ campaigners argue that the flow of migrants helps to fuel our economy and our membership makes trade within the EU, and negotiating deals elsewhere, much easier. The reality is that the real impact of Brexit is unknown.  But, what potential impact might a vote to leave have on planning and development?The majority of the English planning system is intertwined with European law, particularly regarding environmental considerations.  The impact on the English planning system would depend on whether a total Brexit was achieved, or the UK retained access to the single market (through the EEA or EFTA) - akin to the Switzerland model.  Inside the single market, most EU laws would still apply in the UK, but the ability to influence future EU policy would be limited (even though England would still be bound to adhere to them). Outside of the single market, EU laws and policies would no longer apply. There are hundreds of EU directives that are transposed into English law on issues ranging from packing waste to the protection of copyright. One of the key directives that impacts on English planning is the Environmental Impact Assessment Directive that is transposed into the Town and Country (EIA) Regulations 2011 (as amended).  If the UK opted out of the single market, it would no longer be bound by the obligations that are set out in the EU EIA Directive, although in the short term it would be unlikely that the EIA Regulations in force in England, would be significantly amended. In the event of a total Brexit, the government may come under pressure to dilute the English EIA Regulations to cut red tape and bureaucracy within the planning system - a well-publicised aim of the Coalition and Conservative governments (although it is noted that they have recently been amended). There is however a risk that any further relaxation of the Regulations could result in England falling behind in the protection of people and the environment.  Whilst it is easy to identify the cost and time that is associated with proposals for EIA developments, it is less easy to quantify the harm that has been avoided through the thorough assessment of any significant environmental effects by the decision-makers.Business leaders and senior political figures have expressed concern that Brexit would have significant ramifications for the British economy. The Bank of England has warned that a ‘leave vote’ may increase the risk of a credit crunch and higher interest rates for borrowers: “Heightened and prolonged uncertainty has the potential to increase the risk premia investors require on a wide range of UK assets, which could lead to a further depreciation of sterling and affect the cost and availability of financing for a broad range of UK borrowers[2]” This could result in developers and housebuilders having problems in drawing down funds to finance development. A knock-on effect would then be felt and this may result in a slow-down within the property market, together with a reduction in the number of planning applications that are submitted.However, the impact of an EU departure may be felt more keenly in the construction phase of the development process. Access to labour is a key concern for the construction industry, without which it would be incapable of functioning. It has been well-documented that many British developers rely heavily on foreign workers to fill both skilled and unskilled positions.  The free movement of people  (and goods) is one of the four founding principles of the EU and helps to provide UK construction companies with a vital resource – employees. A vote to leave in June could mean (depending on the stance that the UK government takes on immigration and work visas) that foreign workers would find moving to the UK much tougher. Migrants may choose to work in other EU countries where movement will remain relatively easy, leaving British firms with a staffing crisis and housebuilders with swathes of sites that they are unable to build out due to a lack of workers. The cost of construction may also increase significantly due to the increase in workforce wages that may arise from a supply/demand imbalance of workers, which could push house prices up further.So, what is the consensus within the industry? A recent poll undertaken by Property Week found that around two thirds of property professionals wanted to remain in the EU[3]. Simon Rubinsohn (Chief Economist at RICS)  appears wary of the impact that an out vote may have on the property markets and has said:“…untying the UK from arrangements built up over many years and recasting them in new framework may well provide opportunity, but it certainly won’t bring certainty or clarity for some time afterwards.“ The RTPI on the other hand has chosen to say silent on the matter.If Britain does vote to leave, a withdrawal deal is likely to take at least two years of negotiations to agree. Any UK legislative changes would not be felt for some time after that. NLP’s Planning & EIA Director Nicola Mableson is clear:,“While EIAs entail a lot of work for major applications, they represent a tiny fraction of developments' capital costs. I suspect EIA is here to stay. It is an effective method to assess the acceptability of these developments. Whether they adopt a different form is a different question.”The general consensus is that an out vote would affect the British economy in some way and a knock-on effect is likely to be felt by the property industry. Immigration has been a hot topic of debate and the Government may come under pressure to implement changes to the UK’s migration policies sooner rather than later. This would put pressure on the construction industry to ensure that its workforce would remain intact.Whatever the outcome of the June referendum, NLP will remain at the forefront of planning analysis and keep our clients informed of any potential changes to the UK planning system arising from it, and advise on how best to respond and adapt to changing circumstances. [1] http://whatukthinks.org/eu/[2] Statement from the banks Financial Policy Committee http://www.bankofengland.co.uk/publications/Documents/records/fpc/pdf/2016/record1604.pdf[3] http://www.propertyweek.com/news/two-thirds-of-property-professionals-want-to-remain-in-eu/5079481.article 

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