Comment

Planning for growth

It’s been a hectic few weeks of announcements from our new Government. The direction of travel for economic growth was well trailed in advance and the scale of the ambition is now also becoming clear.

Labour’s manifesto committed to kick start economic growth with “good jobs and productivity growth in every part of the country”. The recent proposed changes to housing targets (of which more here) are certainly ambitious. With expected housing completions hovering at around 200,000 this year, getting towards the proposed new target of 370,000 homes a year could unlock up to £20 billion of additional investment every year in construction alone.

While policies on housing, Green Belt and renewables may dominate the headlines, recent proposed changes to the NPPF signal a more positive approach to economic growth which is also hugely significant for our sector.

The economy: what is changing in NPPF?

The changes to the chapter of the NPPF on the economy are subtle but sharply focussed on accelerating growth.

In summary: 

• Whereas current policy requires plans to “set criteria or identify sites for local or inward investment” they must now do both;
• There is a new requirement for plan-makers to identify “appropriate sites for commercial development which meet the needs of a modern economy”; and 
• When it comes to addressing the needs of particular sectors, there are the well trailed measures to make it easier to deliver laboratories; data centres; gigafactories; grid connections; and freight and logistics facilities, but it is worth noting that these are examples not an exhaustive list of sectors to be supported.

Perhaps most telling is the addition of a new imperative for planning policies and decisions to make provision for “the expansion and modernisation of other industries of local regional or national importance to support economic growth and resilience”.

This phrase is deliberately widely drafted:
…… expansion or modernisation
…… of other industries
…… of local, regional or national importance
…… to support economic growth and resilience

It brings into sharp focus that local plans should take very seriously the requirement to “positively and proactively” encourage sustainable economic growth (incidentally a requirement that has effectively been in each previous version of NPPF but not consistently applied).

In another positive move, the proposed changes make explicit that delivering strategic infrastructure and building economic resilience are matters that will be addressed as part of future proposals for strategic planning across local authority boundaries.

Why does this matter?

Because context matters and the context for what, of themselves, may seem like tweaks to national policy includes:

1. This “mission led” Government has made clear that economic growth is not only a mission in itself, it is the means by which other missions will be achieved. It is only with increased revenue flowing into the exchequer that Government can fulfil its other missions for investment in things like the NHS; education and addressing crime.
2. Planning reform is seen as central to boosting economic growth. How many times have we heard the PM, the Chancellor and other Ministers cite planning reform as the key means to be “builders not blockers”? Changing regulation is a relatively cheap way to stimulate investment and economic activity and it can be put in place relatively quickly. Hence revising NPPF is in the Government’s 100 day plan^[1].  
3. There is more policy to come. The Government is committed to introducing a national Industrial Strategy which will be a partnership with industry to “seize opportunities and remove barriers to growth”^[2] in all parts of the country. A sectoral approach is promised to driving competitive advantage and supporting innovation, investment and high quality jobs.
4. This national strategy will be complemented by “Local Growth Plans”^[3]. Other than that they will become a statutory obligation as part of the planned English Devolution Bill, we have little detail of how they will do it, but their explicit purpose is to enable local leaders to “kick start their economies”.

So what could this mean in practice?

The priority being afforded to driving economic growth will have implications for plan-making and decision taking. Here are some thoughts on how industry and plan-makers should respond.

1. Dive deep 

Whether the objective is “positively and proactively” encouraging sustainable economic growth or “seizing opportunities”, a deep understanding of all areas of a local economy will be essential. Not just of what it comprises by sector or use class, but how it is performing and changing. Which sectors are growing and have most potential? What’s happening to productivity? Where can synergies and clusters be encouraged? And what does this mean for types and location of premises and land?

Once this is understood a strategy for growth can be devised.

2. Don’t look back

For decades now, most local plans have, to greater or lesser extent, based provision for employment land on past rates of take-up with perhaps a modest allowance for choice and competition in the market. This approach is backward looking and does not keep pace with the needs of “frontier” sectors of our economy.

To address the new policy imperative a more forward-looking approach is needed. Plans need to engage with business; trade bodies; academia; and research bodies to identify the opportunities and trends that will drive further economic growth and evolving requirements for the location and types of floorspace. This would help to identify opportunities for clusters of organisations – public and private sector – that drive innovation, collaboration and higher productivity.

3. Join the dots 

More jobs and homes in all parts of the country will change our economic “footprint”. We need to plan for the skills, business ecosystems and supply chains that enable this. For example, we looked at the impact of new housing on the need for modern logistics space here. Boosting housing delivery in the way this Government plans will drive demand for more logistics floorspace and connecting infrastructure in more locations. Strategic plans will have a key role in ensuring robust and sustainable supply chains and Local Plans must not forget the need for that “last mile “ of the chain to our front doors.

4. Keep supply in mind

We have accepted for a long time that a future supply of deliverable housing land is good planning. And yet there is no equivalent provision for employment land.

The BPF argued eloquently for a more forward looking approach to supply here. We made a similar case here. Such an approach would introduce a rigour to the testing of suitability of land that is missing in many plans. It’s disappointing, especially given the centrality of economic growth for Government policy, not to see a change to NPPF. Reiterating our call for this will be a part of our representations on the NPPF.

In conclusion, while the changes to the economic policies of NPPF are subtle and may not grab the headlines in the way other changes have, they pave the way for significant changes to the way we plan for and deliver employment land. If what has been announced so far is a “downpayment” on what is to come there are reasons to be optimistic that our sector can help lead the economy out of what has been a prolonged period of low productivity and stagnant real wages.

To further discuss the proposed amendments to economic policies in the NPPF, please contact Dave Trimingham.

6 August 2024

[1] Albeit in launching the revisions to NPPF the Deputy PM referred to new policy being in place by the “end of the year”.
[2] Labour Manifesto
[3] Through devolution agreements with elected mayors/combined authorities