Gov shakes up UK planning system
#Week30 was a busy one for lots of people, getting those last bits of work done before heading off on holiday. But perhaps nobody got quite so much done as the UK’s housing and levelling up minister Michael Gove. In the space of a few days, he announced new tweaks to the UK’s planning system, decreed that all new buildings over 18 metres in height should have at least two staircases (the previous threshold was 30 metres) and refused permission for Marks & Spencer to redevelop its Oxford Street store.
Of these, it is the planning reforms that he will hope has the biggest long-term impact. The UK has long struggled to build enough homes, with the planning system picking up much of the blame. Gove has a reputation for effectiveness, and if anyone in the current UK Government can enact real change, it is probably him. But there have been attempts at reform in the past, and they mostly become diluted or stymied before being quietly forgotten.
As useful as some of the new initiatives are, they don’t so much replace existing regulations as create a new layer of rules above them, and this is part of the UK’s planning problem. Over the years it has become incredibly complex, and subject to such a huge range of criteria that a valid reason to deny almost any scheme can usually be found. There is a reason why “planning risk” is such a thorny subject when it comes to capital investment.
At the same time, the negotiations around planning applications – affordable housing provision, infrastructure, additional levies - encourages the most optimistic to bid up land values. If it subsequently turns out to be unviable the negotiations start again. The ‘planning gain’ uplift in value is captured almost entirely by the landowner, while the local authority that actually grants the permission battles to get something in return.
What developers need, more than anything, is certainty. Clear, consistent and, crucially, non-negotiable rules would reduce planning risk of an unanticipated negative decision. Similarly, all parties working from the same assumptions prevents more effusive operators from pushing land values higher than they would otherwise be.
Look around the world and it soon becomes clear that a prerequisite for a successful planning system is simplicity and clarity in the obligations that are being enforced. Such a solid base brings further advantages, allowing a more dynamic approach as circumstances demand; recent Spanish restrictions around energy useare an example of how a simplified system can quickly change behaviours.
The UK would do well to learn lessons from the planning systems of some of its neighbours; equally, the impact of these new initiatives – in particular the state development corporations – will be followed closely elsewhere.