Proposed Labour Planning Reforms and Economic Growth

Panorama shot of Cambridge © Pawel Pajor | Adobe Stock

This article discusses the proposed changes to the National Planning Policy Framework (NPPF) that were announced by the Labour Government, their intentions and implications, as well as whether these planning changes will boost economic growth.

On 30th July 2024 Deputy Prime Minister and Housing Secretary, Angela Rayner addressed Parliament to lay out the Labour Government’s intentions for planning reform. These changes are intended to secure economic growth for the United Kingdom, as mentioned in the King’s Speech during the re-opening of Parliament on 17th July 2024.

New ambitious housing targets and readdressing the Standard Method

The Government have announced their ambition to have 1.5 million homes developed within the next five years. This target will be reinforced by a new Standard Method – a new way of assessing how many houses are needed in a particular area. The new standard method has now led to a 20% reduction of housing in London. This would result in 90% of local authorities outside the capitals (London, Belfast, Edinburgh, and Cardiff) building more, with the biggest increases to the North East, North West and the East Midlands. Nationally, the new method produces a target of 371,500 net additional homes a year, up from 305,700 under the previous method.

It is apparent that this increase in ambition will require development across the country to significantly increase in pace and scale. Further amendments to planning, reforms to the NPPF, and the announcement of the Planning and Infrastructure Bill and the Devolution Bill will also assist in achieving these targets.

1. NPPF reforms

On 2nd August the Labour Government opened a consultation on the proposed changes to the National Planning Policy Framework. This was essentially a ’tracked changes’ copy of the original NPPF document, demonstrating where alterations are proposed.

These proposed changes are fundamentally initial strokes of pens, putting things in and cutting things out. Labour has said they will undertake this reform within their first 100 days.
Formal consultation ends on 24th September. Changes will be formally published by the end of the year.

The main points of these reforms are:

The removal of references to “beauty” and the “beautiful”

There will be a refocus on quality, as opposed to beauty, in design considerations. The intention is to ensure that design and development are more objective, sustainably designed, and in line with the current and future needs of the area.

The introduction of the Grey Belt definition

The NPPF proposals have released a definition of ‘Grey Belt’, which is:

“[…] land in the green belt comprising previously developed land and any other parcels and/or areas of green belt land that make a limited contribution to the […] green belt purposes […], but excluding those areas or assets of particular importance […]”

Local authorities will be expected to identify grey belt areas within their green belt. A set of ‘golden rules’ are also included to ensure that any developments in these areas provide benefits to both communities and nature. These rules include:

Brownfield first: Within the green belt, any brownfield site must be prioritised for development.
Grey belt second.
Affordable homes: Plans must target at least 50% affordable housing delivery when grey belt land is released.
Boost public services and infrastructure: Plans must include ‘Levelling Up’ proposals such as boosting public services and local infrastructure, like more school and nursery places, new health centres and GP appointments.
Improve genuine green spaces: making them accessible to the public, with new woodland, parks and playing fields.

Areas or assets that will be exempt from the rule will include Sites of Special Scientific Interest, local green space, Areas of Outstanding Natural Beauty, irreplaceable habitats, national parks, heritage coast, designated heritage assets, and areas at risk of flooding or coastal change.

The definition of Brownfield Land has also been broadened. This supports a ’brownfield-first‘ approach and is designed to increase approved development on brownfield sites.

The following proposals are also under consideration:

Nationally Significant Infrastructure Projects (NSIP) reform

The Labour Government’s proposals place an emphasis on the criticality of the next 25 years. Economic growth will be the focus, along with decarbonisation and climate change resilience. Policies should reflect the national interest first, over and above local interest.

Nationally Significant Infrastructure Projects include data centres, laboratories, solar, onshore wind farms, water projects, and gigafactories. When NSIP was established in 2008, powers were given to an independent inspectorate through the Infrastructure Planning Commission (IPC), which initially consisted of a two-and-a-half-year process. However, in 2011 the Localism Act abolished the IPC and transferred decision making powers to the relevant Secretary of State. As a result, NSIP can take four years to complete a process.

These reforms would streamline the approval process, which would allow nationally significant projects to be developed sooner. This would include developing a database of NSIP projects that are similar, and in similar areas, which will allow projects to go through a shorter process once a similar project is in the database.

Changes to intervention criteria

The Local Plan Intervention Policy may be amended to ensure that where there is a risk of under-delivery, the Government can intervene when necessary to ensure housing targets are met.

Increases in planning fees

Finally, it is proposed to increase planning fees to allow for local authorities to attain greater resources to process planning applications, which would subsequently improve performance and support a sustained increase in development.

2. Planning and Infrastructure Bill 2024

This Bill aims to speed up and streamline the planning process to build more homes and accelerate the delivery of major infrastructure projects in alignment with the Government’s industrial, energy, and transport strategies. It will be one of many to boost housing and infrastructure with measures including modernising planning committees, unlocking development sites, as well as nature recovery and development funding. The Bill will apply to England and Wales with some measures applying in Scotland.

3. Devolution Bill

This new Bill will empower ‘metro mayors’ and other local leaders to develop their own growth missions. It will also expand the devolution framework to include drivers of growth, such as planning powers. The Bill will also reform governance arrangements to make it easier for mayors and combined authorities to make progress with strategic objectives, including spatial plans. The Bill will make devolution ’the default setting‘, and place an obligation on the Government to either agree with strategic growth decisions or to publicly explain why they disagree.

A route to economic growth?

Overall, the objectives within proposed reforms are clear: unlocking economic growth by addressing housing and infrastructure under-delivery, contributing to economic growth by allowing for employment and opportunity.

The intention of the reforms is to have a more effective approach to strategic subregional planning and ensure more applications are approved, allowing more work to take place, in an environmentally-friendly way. The reforms also provide long term plans for where growth and development will take place, and how the Government will support it. Finally, the reforms will also underscore targets on housing, transport, and net zero, increasing investor confidence.

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