NPPF: A year on - the winners and losers by sector

Planning iStock 000002733689Small 146x219To coincide with the recent anniversary of the National Planning Policy Framework, the cornerstone of the government's pro-growth agenda, Suzan Yildiz revisits the NPPF's substantive policies and considers its impact on retail, office and residential sectors. Growth prospects appear indeterminate to pessimistic to say the least, she finds.

A year ago Greg Clark, then planning minister, published the National Planning Policy Framework (NPPF) condensing over 1,300 pages of cancelled policy into 59 pages of a thematic tour de-force of planning to the consternation of many and the cheers of a few. In so doing, the government pitted pro-development against environmental lobby, centralism against localism (notwithstanding its commitment to the latter).

The purported aims of the NPPF were to kick-start economic growth ("Development is growth" proclaimed Clark's foreword) and an allegedly sluggish planning system. Did the NPPF herald a new era of growth or even improve the rate of decision making for retail, office and residential development? Writing on the conservativehome.blogs, Clark declared "the signs are that the Framework is helping to provide the homes and also the business premises that we need" (click for blog). However, objective research from planning consultancy Nathaniel Litchfield & Partners (click for report) and Savills (click for report) paints a more complex picture.

By way of refresher, the NPPF boldly introduced a presumption in favour of sustainable development whilst preserving the primacy of the local development plan. The presumption would generally have the greatest effect in the event of an out-of-date development plan or lacuna in local policy. Sustainable development remains a challenging concept, but encapsulates economic, social and environmental factors. Thus, 'sustainable economic growth' is at the heart of the NPPF.

Retail

The NPPF is without doubt pro-town centre. It emphasises the promotion of well-defined and competitive town centres. Following a highly public war of words between the former planning minister and environmentalists fearing sprawl, the NPPF preserved the sequential (town centre first, out of centre last) policy to town centre uses, chief among them retail.

Through analysis of 140 appeal decisions for new retail floorspace (with a net increase), NLP found that the success rate for retail development remained virtually static at 47% pre-NPPF and 46% post NPPF. Some improvement was discernible for small retail schemes (under 500sqm gross) which rose by 11% and large retail schemes (over 2,500 sqm gross) up by 6%. Despite the strong pro-growth agenda, (and the Midas touch of Mary Portas), retail has not fared as well as hoped for in the brave new world of the NPPF. As other commentators have observed, the sequential approach to retail uses remains an important consideration in decision making despite slashing detailed town centre policies in the form of PPS5.

Office

Despite initial ambiguity, office uses do fall within the town centre first policy. However, the NPPF by no means affords equivalent primacy to office development. The sequential test was preserved for major office schemes but disapplied to small rural offices. The NPPF strongly advocates against long-term protectionism of sites allocated for employment uses without reasonable prospects. Significantly and despite resistance, the NPPF introduced a clear policy direction to LPAs to grant permission for commercial (B class) to residential changes of use unless economically inappropriate.

Whilst, similar statistical analysis is not available for office appeal schemes, anecdotal evidence on appeal and during determination by LPAs suggests that office and employment uses are possibly being sacrificed for residential development. The rate of success on office appeals is also likely to be static if not worse.

Housing

The NPPF housing policies are an emphatic rallying cry for LPAs to 'significantly boost housing supply' by demonstrating annually a rolling and deliverable five year supply with disincentives for those that fail.

NLP's report demonstrates the success rate on appeal for major residential development increased by almost a fifth (20%) to 65%. Clark's claim that in England "the number of new homes granted planning permission has risen by a quarter", although optimistic, is perhaps not wholly inconsistent. Housing does appear to have fared better on appeal.

However, the real measure of 'sustainable economic growth' which results in new homes, new jobs, vibrant communities or town centres, is surely construction output. Two questions must, therefore, be posed…

Firstly, is there genuine growth in retail or housing which will translate into 'bricks and mortar' or sustainable re-use of land? Planning practitioners know, the grant of a paper permission does not a building make. Far too many permissions are granted, banked and mothballed. The latest monthly figures released by the Office of National Statistics on 8 March 2013, show that construction remains in decline. New construction work decreased by 12.7%, the greatest decline was in the private commercial sector which fell by 14.5% (click for statistics). It is not suggested that this is a failing attributable to the NPPF. It is too early to measure the impact of the NPPF on outputs, but that must be its ultimate measure of success. Assuming, a generous average of 18-24 months to prepare for implementation of planning permissions for major development (i.e. discharge of conditions), the earliest period that should show a spurt in meaningful construction activity (namely building out, not banking permissions) connected with the NPPF would be Spring 2014. To ascertain the true success of the NPPF, further objective monitoring and analysis of outputs is necessary.

Secondly and more likely, is the increased success rate on residential appeals attributable to an office-to-residential conversion phenomena given the green light in the NPPF? More analysis of this is necessary. However, as stated above, empirical evidence of decision making lends support to this proposition. Further, analysis by Savills into the impact of the NPPF on 190 local authorities reports a "worrying tendency to reduce housing land allocations". In particular, the housing supply planned in draft and adopted plans in the South East appears to have dropped by 8.8% in recent years and 33% of the LPAs studies lack sufficient housing sites.

Worryingly, in February 2013 the Government published a ministerial statement (click for statement) re-hashing previously resisted and abandoned proposals for permitted development rights for conversions from commercial to residential (i.e. without planning permission). The stated aim is the re-use of brownfield land and underused commercial buildings. The resurrection of these 'ghost of office past' proposals, would place the existing NPPF policy onto a statutory footing. LPAs and businesses alike fear that this could potentially undermine local economic policies protecting employment uses and, consequently, the very vitality of the town centre uses the NPPF seeks to promote. Given the constant demand for housing and its higher profitability in relative terms, the danger is automatically permitted office-residential conversions are unlikely ever to revert to future employment uses which arguably sustain local economies. If this outcome materialises, it may lead to a short-lived spurt in housing supply, but could in the long term undermine the 'pro-sustainable growth' ethos of the NPPF.

In conclusion, housing appears to be a winner but possibly at the expense of commercial/office space. Despite strong policy pronouncements in the NPPF, and the intervention of the Queen of Shops herself, retail growth remains static and according to the construction output figures the outlook is pessimistic. Unsurpisingly, for those familiar with the workings of LPAs and the Inspectorate, NLP report that the NPPF resulted in 'no change to the speed of decision making'. Perhaps the NPPF's greatest success is that, despite initial resistance, many have found it relatively user-friendly. That this is hardly the marker of success, surely, even its authors would agree. The early signs of 'homes and business premises being provided' are indeterminate to say the least. To measure the NPPF's long-term legacy, queue the construction output figures for a hopefully less bleak Spring several years from now.

Suzan Yildiz is a Senior Associate and leads the planning practice at Olswang LLP. She can be contacted on 020 7067 3346 or by This email address is being protected from spambots. You need JavaScript enabled to view it..