The dust has now settled on the Government’s eagerly-awaited Industrial Strategy, published back in November 2017 to unveil a long term plan to build a Britain “fit for the future” (for a handy summary of its highlights see our Insight Focus and previous blog). Framed by four bold and ambitious ‘Grand Challenges’, the Industrial Strategy also defines some more immediate, short term deliverables in an attempt to galvanise different places across the country to respond to the national imperative and priority to boost productivity.
The most pressing of these is the requirement for Local Industrial Strategies to be brought forward by Mayoral Combined Authorities (MCAs) and Local Enterprise Partnerships (LEPs) (or devolved administrations in Scotland and Wales). These should set out a plan for how local leaders and businesses will work together to deliver growth. The first are expected by March 2019 and we have seen considerable progress being made up and down Britain to work them up. Local Industrial Strategies will become an important mechanism for places to ‘broker’ a favourable deal with Government for the resources they need to enable growth and development over the coming years.
In many cases, the geography covered by these Local Industrial Strategies will extend to sub-regions, growth ‘corridors’ and large metropolitan areas, so a key challenge will be showcasing a collective economic vision and cohesive plan for growth. This means that local partners – namely local authorities – have a strong incentive to engage with MCAs, LEPs and devolved administrations to proactively steer the development of local strategies to ensure their specific economic priorities and growth opportunities are given the prominence they need.
But in a competitive environment – where those who ‘shout loudest’ often win – local authorities need to be armed with robust evidence, a convincing narrative and a well-articulated case; avoid getting bogged down in detail and instead focus on concise and impactful justification. Above all, the onus is on individual authorities or groups of authorities working together to mobilise now during this current window of opportunity – while there is still time to influence and make a difference.
We have identified 4 key ‘building blocks’ for successful Local Industrial Strategies, summarised below. In our new product brochure, we provide some ideas on how local authorities can proactively shape the development of Local Industrial Strategies for their area, alongside some practical examples of the types of evidence and outputs that could be used to support this process.
This provides a useful way of thinking about the best means of interacting with the Local Industrial Strategy process. For instance, you might already have a good understanding of those industrial clusters of particular or unique economic significance in your local area, but need to demonstrate their full economic value in a ‘tangible’ way (see our recent example for Manor Royal Business District in Crawley). Equally, you might have a long ‘wish list’ of local projects and priority schemes but need to establish which ones are most likely to deliver value for money in the context of strong competition for finite funding and resources (for example see our Infrastructure Investment Plan for the Isle of Wight).
At Lichfields, we work closely with a range of different partners across the country to shape the collective economic narrative, vision and strategy to enable places to thrive. We can help by bringing our extensive experience and track record in supporting our clients to articulate their economic case, secure investment and assess their impact.
To find out more, have a look at our new package of services and tools which is specifically designed to help local authorities shape industrial strategies for their area, and get in touch.
Assessing the case for removing light industrial to residential permitted development rights
The temporary permitted development right (PDR) for change of use from Use Class B1(c) light industrial to C3 residential came into force on 1 October 2017. This means that light industrial premises which have a floor area of less than 500 sqm can now be converted to residential use under the prior approval process, rather than requiring an application for planning permission. The temporary PDR is in force until 1 October 2020 (though any changes of use permitted during this period are permanent). The process is subject to various limitations and conditions, which are covered in an earlier blog by my colleague Owain Nedin.
The new PDR represents another of the Government’s wide-ranging measures aimed at boosting housing supply across the country. However, the PDR raises some potential issues for the future economic vitality of local areas that local planning authorities may need to consider. These include:
permanent loss of business space, particularly of smaller industrial and workshop premises which can play an important role in the local economy;
limiting the ability of local areas to plan effectively for business needs, employment and growth; and
creating potential uncertainty for businesses and reduced scope for land use planning and place making for the local planning authority.
Local planning authorities have the ability to remove PDRs by introducing what is known as an ‘Article 4 Direction’. This allows authorities to require change of use applications, meaning they can refer to the development plan and weigh material considerations into the balance in the process of making a decision. An Article 4 Direction requires a clear justification and a defined boundary for the proposed exemption area. Local authorities must therefore compile the necessary evidence to meet these requirements.
There are two main types of Article 4 Direction: immediate and non-immediate. An immediate Direction removes a PDR with immediate effect, but must be confirmed by the local planning authority following local consultation within six months, or else the Direction will lapse. A non-immediate Direction comes into force after a period of 12 months and the PDR is removed upon confirmation of the Direction by the local planning authority following local consultation.
Lichfields has developed a staged analytical framework to support local authorities in making a robust case for implementing a non-immediate Article 4 Direction. The framework draws on a range of economic data sources, local commercial property market signals and the existing planning policy position. It enables local authorities to scope, evidence and prepare the case for an Article 4 Direction, by identifying and quantifying light industrial stock that qualifies for the PDR and the wider significance of this space within a local area in terms of business activity and economic value. In turn, this can allow an appropriate exemption area to be defined and taken forward through the due process as the basis for making a Direction.
Lichfields recently prepared such an analysis (also including offices which are subject to similar PDRs) for the town of Newhaven on behalf of Lewes District Council. Newhaven was one of 18 locations that were awarded Enterprise Zone status in 2015. As part of the analysis, Lichfields quantified the number of eligible light industrial premises in the town and the proportion that fall within the Enterprise Zone area.
Light industrial floorspace clustering example output.
The analysis shows that Newhaven is an important location for light industrial activities in Lewes District, containing around a quarter of the local authority’s total stock of light industrial space. Furthermore, the vast majority of light industrial premises that are eligible for the PDR are within the Enterprise Zone, which has been designed to help stimulate the growth of the local economy.
The quantitative analysis was coupled with site assessments to identify the function of different employment clusters in the town. The analysis concluded that the Enterprise Zone supports considerable light industrial activity, which is likely to develop further given that priority sectors for the Enterprise Zone include environmental technologies and healthcare and biologics.
Lewes District Council’s Planning Applications Committee reviewed Lichfields’ analysis and found that it provided “clear evidence to support the implementation of Article 4 directions in Newhaven to protect office and light industrial use”. The Committee resolved to approve the Directions in October 2017 and these are likely to come into force later this year. They will serve to protect employment floorspace in Newhaven, thereby supporting the expansion of innovative, high value growth sectors in the Enterprise Zone.
The new PDR has potential implications for industrial locations across the UK. The recently published Draft London Plan encourages London Boroughs to introduce Article 4 Directions where appropriate to ensure they can retain sufficient industrial and logistics capacity. As identified in Lichfields’ London Plan Insight, the vast majority of Boroughs are expected to retain or increase their existing industrial capacity. The implementation of Article 4 Directions will be vital to support the economic function of industrial clusters across the capital to help meet the ambitious targets for economic growth set out in the London Plan.
Lichfields’ Article 4 Direction framework brings together robust analysis of local property markets and economic indicators which can help local authorities identify and prepare the case for making a Direction. For further information, please see our information flyer or get in touch.