A tonic for localism woes

Enterprise zones, sustainable development and reforms of the planning system were at the heart of last week's Budget. Stephen Webb analyses their likely effect.

George Osborne's Budget indicates that the government has finally woken up to the need for a more pro-active and pro-development planning system. While the presumption in favour of sustainable development is not new, the tenor of the Chancellor's approach in outlining measures to stimulate development is to be welcomed.

While Localism may have a part to play, the impact of the Localism Bill and cuts to local authority services have had a negative impact on developer and planning authority sentiment at a time when it is least needed. The development industry needs to be kick-started not only by the availability of finance but also by a planning system which encourages sustainable development rather than creating hurdles by promoting nimbyism and stripping planning authorities of their resources.

Enterprise Zones

While some may see them as creatures of the past, the new Enterprises Zones will have their part to play and should be welcomed, but they are not a panacea. The lessons of the 1980s and 1990s need to be learned so that the new Enterprise Zones are able to deliver genuine prosperity to areas where there is real potential.

London's Isle of Dogs is the best of example of a successful Enterprise Zone but many were not so successful and resulted in expensive infrastructure, few jobs, displaced economic activity and benefits being realised by landowners rather than by businesses. Many of the promised simplified planning processes were not delivered in practice and businesses often relocated once the incentives came to an end.

The new Enterprise Zones announced in the Budget include the LEP (Local Economic Partnership) areas of Birmingham and Solihull; Leeds; Sheffield; Liverpool; Greater Manchester; West of England (including Bristol); Tees Valley; North Eastern; the Black Country; Derby and Nottingham. The Mayor of London has also announced that there will be an Enterprise Zone covering London's Royal Docks.

The Enterprise Zones will potentially benefit from a range of incentives including a 100% business rate discount worth up to £275,000 over a five year period; retention of business rates growth within the zone for a period of at least 25 years shared by the local authorities in the LEP area to support their economic priorities; a simplified planning system and superfast broadband.

The government's prospectus on Enterprise Zones makes it clear that it expects LEPs to submit bids for Enterprise Zones and that there should only be one in each LEP area. The local planning authority for the area will be expected to put a local development order in place which will set out the planning regime. There will be consultation on the local development order and the question will then be what weight will be given to local views.

Critically, incentives in these areas need to be tailored to meet local circumstances and should not solely benefit landowners. The benefits must be widely shared by businesses and communities. Planning processes can and should be simplified, but there needs to be a recognition that this may fly in the face of the government's Localism agenda. The government needs to be clearer about what its planning objectives are.

Planning decisions in 12 months

The 12 month guarantee for the determination of applications including appeals is another welcome initiative but will still depend on local planning authorities and the Planning Inspectorate being resourced properly in order to deliver a professional service at the coal face. Speeding up the delivery of planning decisions to this degree also requires a radical rethink about the volume of information which is needed to support planning applications and the conduct of planning appeals. The Killian Pretty review of the planning system (2008) recommended a reduction in the burden of information required in order to reduce the time and resource devoted to determining applications. This and the other Killian Pretty initiatives need to be implemented swiftly to help meet the 12 month determination target.

Emphasis on housing delivery

Other initiatives such as speeding up the delivery of planning decisions on surplus military land, equity loans to 10,000 first time buyers to buy new property and the pilot schemes for community land auctions are all aimed at stimulating the development industry and delivering new homes and are a move in the right direction.

The simplification of the conversion of commercial buildings to residential use is a particularly interesting proposal and could lead to a wave of conversions of redundant commercial buildings into new homes. The detail of this proposal has yet to be fleshed out but an obvious question is how to deal with affordable housing in this context? If, for example the change from commercial to residential became permitted development (no requirement for planning permission), at what point would the provision of affordable housing be considered? Perhaps not at all? This would please many developers and might encourage more developers to deliver greater numbers of dwellings as viability concerns might be more readily satisfied.

The default answer to development is "yes"

It seems as if the government has finally recognised that there is a need to counter balance the powers of Localism and to accelerate the rate of development needed to help the UK economy climb out of the doldrums. The "Big Society" mantra is difficult to disagree with in its broadest sense, but given the inevitable local resistance to change there is a real need to ensure that the development industry is given the momentum it requires to bring forward change to our towns, cities and rural areas where that can result in employment growth and sustainable communities.

It was therefore refreshing to hear, in no uncertain terms, that the default answer to development is now "yes". Enterprise Zones and the other initiatives will assist in this process, but a single country-wide "enterprise zone" freed from the continued confusion and stagnation over the direction of the planning system would be an outcome welcomed by all.

Stephen Webb is a planning partner at international law firm SNR Denton UK LLP (www.snrdenton.com).