Ambitious reforms of planning law seek to boost economic growth, alleviate the housing crisis and foster investment. Will they succeed? Maria Shahid reports
The low down
Regeneration is the political holy grail for both central and local government. Done right, it promises that strategic planning can effect a change in physical space that provides housing, pulls in private investment, improves infrastructure and facilities, and boosts business and social activities. Building is central to the government’s ability to get the economy growing and improve what the Institute for Fiscal Studies notes is ‘abysmal growth in productivity’. The planning process and planning law are integral to delivering such ambitions. Yet, lawyers caution, applications for planning permission are at an all-time low. And even then, local authorities are swamped. Can a shake-up of planning law and a strategic reorganisation of local government heal the malaise?
Regeneration is a precondition of economic growth, boosting local economies and communities.
‘It unlocks everything. It touches every facet of our lives. It feeds into everything; it’s about our physical space, and it brings investment,’ explains Rachel McKoy, chief legal adviser and monitoring officer at the London Borough of Newham, and immediate past president of Lawyers in Local Government.
At its heart is the planning process, and planning law reform is crucial if the government’s election promise to ‘get Britain building’ is to succeed, say planners.
At present planning permissions are at an all-time low, with many blaming systemic constraints. Data published this month for July to September 2024 showed that received applications for planning permission at district level were down by 7% on the same quarter last year, with granted decisions down 6%.
Cutting through
Policy pledges in Labour’s manifesto included 1.5m new homes, an update to England’s National Policy Planning Framework (NPPF), including restoring mandatory housing targets, taking ‘tough action’ on local plans, supporting planning authorities through funding, and widening devolution to most areas of England.
The detail began trickling through in the second half of 2024, with private practice planning lawyers broadly impressed with the speed of progress to date. A promised update on the NPPF was published in December.
‘The NPPF is now in its final form within the timescale promised, which is impressive compared to the last government,’ notes Simon Ricketts, partner at specialist planning and infrastructure law firm Town Legal in London. ‘It’s all potentially very exciting for clients because it’s by and large the private sector that needs to deliver on those commitments. We are expecting a quite significant shifting of the dial, with the unlocking of planning permissions, allocation and more land development.’
Ricketts adds, however, that while the ‘big picture’ is promising, there is a nervousness among clients: ‘They’ve been here before with big promises from politicians. The reality is that it’s not the planning system alone which is getting in the way of the delivery of homes. Reform of the planning system and policies is only going to get us so far. You need well-resourced local authorities that can process applications quickly, which costs money, and we need people as well. We also need wider economic factors to be favourable to development. The planning process costs a lot of money. It’s certainly not a gold rush.’
December also saw the publication of a policy paper by the Ministry of Housing, Communities and Local Government (MHCLG) to ‘streamline the planning process’ and tackle ‘chronic’ delays. Proposals, which would require changes to primary legislation through the Planning and Infrastructure Bill, include a national scheme of delegation, committees for strategic development and mandatory training for committee members.
Growth and devolution
The English Devolution White Paper, published in December, promises a huge overhaul of local government, including a strategic authority for every area and the introduction of an elected mayor, as well as the restructuring of two-tier local government into strategic authorities. The new strategic authorities will be expected to serve populations of at least 1.5 million.
The white paper notes that devolution can be a vehicle ‘for the change the public expect’, allowing mayors to ‘use their mandate for change to take the difficult decisions needed to drive growth; their standing and soft power to convene local partners to tackle shared problems; and their platform to tackle the obstacles to growth that need a regional approach’.
'At the moment, the way in which local authorities plan is extremely uncoordinated'
Simon Ricketts, Town Legal
The public sector’s role in regeneration is clear, say experts. The Institute for Government’s recent report, Devolution and urban regeneration, notes that public sector intervention is needed for private sector investment to follow, especially in the case of brownfield sites. These can often have ‘complex land ownership patterns that the private sector can struggle to assemble’.
The white paper’s proposals have been broadly welcomed. ‘At the moment, the way in which local authorities plan is extremely uncoordinated,’ notes Ricketts. ‘The duty to cooperate that’s meant to apply to plan-making is a very loose requirement. The possibility of having a sensible look at how planning within a region should be carried out in a sustainable way, and allow for potential new settlements and urban extensions that meet the wider area’s needs, is sensible. It will create interesting opportunities for the private sector working alongside the public sector.’
While a uniform framework could remove much of the complexity, it comes with challenges. ‘Before strategic authorities, we need to have a strategic plan for every area or a spatial development strategy,’ notes Stuart Tym, a planning partner at Knights in Birmingham. ‘These really hark back to regional strategies, which were abolished by the coalition government.’
The government wants to get the ball rolling on its election promise. Secretary of state for housing, communities and local government Angela Rayner was questioned recently by the Commons housing, communities and local government committee on the government’s plans to deliver 1.5m new homes over the next five years, as well as over its devolution agenda. She noted that local government reorganisation is an ‘opportunity’ to help meet housing targets through collaboration with neighbouring authorities.
The local government minister, Jim McMahon, wrote in December to leaders of counties and districts in two-tier areas requiring them to make a ‘clear commitment’ to devolution and reorganisation by 10 January if they want to postpone elections. Speaking on BBC Radio 4’s Today programme, McMahon explained that devolution and reorganisation is about ‘getting as much money to the frontline’ as possible.
'People like Andy Burnham demonstrate how having a heavyweight who can really lobby for a region can work'
Rachel McKoy, London Borough of Newham
So far, at least 39 councils have expressed interest in being part of the first round of devolution discussions, which could lead to 12 new mayors.
However, devolution proposals are a polarising issue. The Local Government Association has noted that while its council members are open to change, ‘local government reorganisation should be a matter for councils and local areas to decide’. It added: ‘Devolution and reorganisation are not the answer to the funding crisis facing local services.’
However, planners argue that change is desperately needed. ‘Anybody who’s been watching local government for the last few years knows that it’s been in freefall and something needed to change,’ explains chartered planner Catriona Riddell, director of Catriona Riddell & Associates. ‘The white paper is making powers and funding much more consistent in all parts of the country. In terms of devolution deals, there needs to be a strategic plan in place now. In return, the government will make the funding process much easier, so it will be an integrated funding regime. This is fantastic for regeneration because it means there is more control over how it is spent locally.’
An increasing number of county councils are effectively bankrupt, notes Riddell, and these reforms may be the lifeline they need. She acknowledges that the transition is going to be ‘horrendous’, but the alternative is worse: ‘They are all broke. They’ve got no money and they’ve got to do something to become financially viable. If there’s an offer of additional funding, and additional powers to deliver services in a better, more efficient way, they would be foolish not to go for it.’
‘The poster boys or girls for how this could work are the West Midlands Combined Authority and the Greater Manchester Combined Authority,’ says McKoy, who in addition to her role at Newham is director of legal and governance at Newham and Havering’s shared services collaboration. ‘They’ve had proper integration in their transport system, including trams, trains and buses. That is really the art of the possible in terms of what you can deliver for an area and really put it on the map. People like Andy Burnham [mayor of Greater Manchester] demonstrate how having a heavyweight who can really lobby for a region can work.’
Soft power, hard choices
While the proposed restructuring of the public sector has benefits from a funding perspective, it will come with extensive upheaval, explains Laura Hughes, partner and public law specialist at Browne Jacobson in Nottingham.
‘Many councils feel that if they don’t get on board with this and get involved early in discussions about what geographies might look like and where powers might lie, they will be left out, with not much choice about where they end up,’ Hughes says. ‘Some local councillors and politicians have come out very vocally opposing it, but others see it as an opportunity and are being more pragmatic. The government seems to recognise that there will be an additional cost associated with this initially, but there is also this dangling carrot that there might be more money to help with the cost of reorganisation.’
The advantages of locally elected mayors with direct access to central government and enhanced leverage are clear.
The English Devolution White Paper notes: ‘Mayoral devolution works because mayors can use their mandate for change to take the difficult decisions needed to drive growth; their standing and soft power to convene local partners to tackle shared problems.’
Hughes says: ‘You can see why mayors will be much more important to government, and will be delivering government policy at regional level.’
Getting building
The government’s plans for devolution dovetail with its commitment to deliver more housing. ‘Mayors are integral to delivering the 1.5m homes committed to in this parliament,’ notes the white paper.
The revised NPPF includes the reintroduction of mandatory housing targets.
Meanwhile, as part of its ‘brownfield first’ approach to new homes, a £68m brownfield release fund was announced by the government in October. Some 54 councils will be able to use the money to turn neglected brownfield land into new homes.
The MHCLG also launched a policy paper in September seeking views on ‘brownfield passports’, with the intention of supporting development proposals that meet design and quality standards.
However, Nicola Gooch, planning partner at Irwin Mitchell in Gatwick, believes that a lack of policy support is not the main issue: ‘The reasons that brownfield sites don’t come forward are more practical. They include the high remediation costs, and the viability concerns of higher build costs and higher alternative or existing use values.’
The government’s plan to mandate that developers build affordable housing on at least 50% of grey belt land had been one of the main concerns of developers.
However, these targets were revised in the latest version of the NPPF, following extensive lobbying by the housebuilding sector. The government now requires developments in grey belt areas to deliver 15% more affordable homes than in the local housing policy, capped at 50%.
‘The flexibility from the government has been helpful,’ notes Claire Fallows, partner and head of planning at Charles Russell Speechlys in London. She adds that while there is still appetite from the housebuilders she acts for, there is also concern about economic conditions: ‘Housebuilders are still buying land. They want to build, but ultimately they need to have somebody to sell to. You need buyers. If those buyers are concerned about their jobs and getting a mortgage and being able to pay it, they are less likely to move.’
Resourcing issues
A 2023 MHCLG survey of local planning departments found that 97% had a planning skills gap. Back in October, nearly 38% of departments reported a decrease in staff.
Tym notes: ‘When I started my career, 70-75% of RTPI [Royal Town Planning Institute]-qualified planners were employed by local authorities. That figure is now less than 50%. I don’t think many of them have left the profession, but most have turned to the private sector for their employment.’
‘We need a better-resourced planning system,’ Gooch says, referencing the recently published skills survey. ‘The vast majority of local planning authorities, sitting at the heart of Labour’s planning reform agenda, are not currently set up in a way that will enable them to deliver it. This is a problem and it needs fixing.’
In the autumn budget, chancellor Rachel Reeves announced that the government will provide £46m of additional funding to recruit and train 300 ‘graduates and apprentices’ to work as junior planning officers.
While the Royal Town Planning Institute, the professional body for planners, welcomed the announcement, concerns remain that it is not enough. ‘There are more than 300 local planning authorities in the country, so that isn’t even one apprentice per authority,’ says Tym. ‘But is that really the right approach? The other idea is to release an element of the budget to upskill planning officers in terms of the changes coming through. While I’m not saying there isn’t a need for those changes that are being made, if we stopped chopping and changing the planning system, you wouldn’t need to spend as much on upskilling for planning officers.’
Planning fees are also set to rise. The government has just released draft legislation for England to propose an increase of 100% or more. However, planning lawyers note that as planning fees are not ringfenced for planning departments, there is no guarantee that they will benefit from these rises.
Cautious optimism
The reality is that many of the proposed changes in the white paper are unlikely to come into effect over the government’s first term. ‘From a legal footing, nothing has really changed,’ says Tym. ‘Where the industry is at right now is that it has more confidence than it had pre-July.’
‘There is definitely more optimism,’ agrees regeneration and new build specialist Merle Wray, partner at Fieldfisher in Birmingham. ‘We just need to see the details of what the government is proposing. An ability to make decisions quickly is key.’
Wray’s colleague, partner Susan Simpson, points out: ‘It can take around 12 months to get planning permission on a large scheme at the moment, and it’s costly to get schemes through. So there was a lot of optimism when Labour was talking about unlocking the planning system.’
Progress is possible, she concludes: ‘This idea that we are going to have more mayors and strategic authorities that should streamline decisions… people are positive about that. Similarly, the grey belt sites are a positive thing, but the reality is that they are quite difficult things to put into practice. So, if they can be successfully brought forward, then it will genuinely revolutionise things.’
Maria Shahid is a freelance journalist
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