Barker Land Use Planning Review

DCLG should revise the policy framework for decision-making, in the context of the plan-led system, to make clear that where plans are out-of-date or indeterminate applications should be approved unless there is good reason to believe the costs outweigh the benefits. One way of implementing this would be to make clear that where an application for development is in accordance with the relevant up-to-date provisions of the development plan, it should be approved unless material considerations indicate otherwise. Where development plan provisions are indeterminate or where they are not up-to-date, the application should be approved unless there is a significant probability that the likely environmental, social and economic costs of the development will outweigh the respective benefits. 15 Plan-making policy laid out in PPS12 and Schedule 8 of PCPA 2004 provides clear guidance on maintaining up-to-date development plan documents. 16 Energy Saving Trust, Response to the Barker Review of Land Use Planning Call for Evidence (2006). A more responsive planning system 1 1.15 One option here would be to add this as a statutory requirement alongside other requirements, such as the need to pay special regard to the desirability of preserving a listed building (section 66 of the Listed Buildings Act 1990) or the need to have regard to the desirability of conserving the natural beauty and amenity of the countryside (section 11 of the Countryside Act 1968). But the same outcome could perhaps more readily be achieved through a revision to the Statement of General Principles (a supplement to PPS1), which does not currently make the point that due regard should be had to the economic, environmental and social benefits of development. A MORE SUPPORTIVE NATIONAL POLICY CONTEXT 1.16 National planning policy is a key material consideration used to determine planning applications. It therefore has an important role to play in ensuring a more positive approach to economic development by local planning authorities and a balance between the objectives of sustainable development. This section focuses on: • a proposed new national policy statement on economic development; • ensuring flexibility in future national policy revisions; • reform to specific elements of planning policy; and • the need to ensure a proactive approach to policies emanating from the EU. Updating policy on economic development 1.17 There is a strong case for updating national policy on economic development and regeneration (currently Planning Policy Guidance 4: Industrial, Commercial Development and Small Firms). This has not been revised since 1992 and is widely considered to be out of date.17 Failure to update this policy has led to some perceptions that the Government has prioritised other policy areas, such as transport or housing, over taking a balanced approach to the delivery of sustainable economic development.18 Chart 1.1 below indicates how infrequently PPG4 is used when determining planning applications, suggesting the low influence it has. And as a recent report concluded: ‘economic development applications are determined by planning departments on their own merits, although the development plan is the key consideration. Other important factors include the transport impacts of the proposal, access issues and the design. The economic benefit of the application tends to be a lesser consideration, although still important.’ 19 21

To improve the framework for decision-making for major infrastructure to support a range of objectives, including the timely delivery of renewable energy: • Statements of Strategic Objectives for energy, transport, waste proposals (including energy from waste) and strategic water proposals (such as new reservoirs) should be drawn up where they are not in place presently. These should, where possible, be spatially specific to give greater certainty and reduce the time taken at inquiry discussing alternative sites. Regional Spatial Strategies and local plans should reflect these national Statements and indicate, in particular, where regional facilities are needed; • a new independent Planning Commission should be established which would take decisions on major infrastructure applications in the above areas. Decisions would be based on the national Statements of Strategic Objectives and policies set in the Regional Spatial Strategy, local development documents and other relevant considerations, including local economic, environmental and social impacts; • the Planning Commission would be comprised of leading experts in their respective fields. Proceedings would be based on a streamlined public inquiry model, using timetabling to ensure timely decision-making. Full community consultation would be carried out and decisions would be taken in a fair, transparent and even-handed manner; and • decisions which are of local importance only, including housing and commercial applications made under Town and Country Planning legislation, should continue to be made by the local planning authority. Where appropriate, and in order to ensure successful delivery of major commercial and housing development with national or regional spillovers, Government should consider the scope for greater use of delivery bodies such as Urban Development Corporations. Delivering major projects 3 of the inquiry is approximately 29 weeks.21 For applications made under other consent regimes the time taken can be much longer: Dibden Bay (an application for a Harbour Revision Order as well as planning permission and other consents) took 66 weeks and the Midlands Metro (an application for a Transport and Works Act Order) 67 weeks. 3.40 Ensuring all Ministers are subject to timetabling would be a valuable reform independently of, or in anticipation of, the creation of an independent Planning Commission. Equally, even in the absence of a Commission there is a strong case for placing planning powers in only one Secretary of State and ending joint and linked decision-making. Large and complex cases, which would formerly have been dealt with by one or more Secretaries of State, would typically be identified at an early stage and be determined by the Planning Commission. Less complex and controversial cases could be determined by the local planning authority or on appeal by an Inspector on the Secretary of State’s behalf. 87

In order to ensure that this new decision-making model is effective the Government should: • rationalise consent regimes to ensure that infrastructure projects of major significance can be treated holistically and that the independent Planning Commission can take all the necessary planning decisions (if more than one is still required) on a particular scheme. Environmental consents would, however, remain separate from planning consents and be the responsibility of the Environment Agency; • critically examine whether there are smaller infrastructure decisions currently made at the national level that should instead be determined by the local planning authority, or by the Planning Inspectorate on appeal; • end joint and linked decision-making so that large infrastructure applications, or applications made by statutory undertakers, which would previously have been decided by two or more Secretaries of State will be transferred to the independent Planning Commission for decision. Non-strategic applications will be determined by local planning authorities or by the Planning Inspectorate on appeal; and • as an interim measure, all Government departments with responsibilities for planning decisions should draw up timetables based on the DCLG model, for major applications decided by Ministers before the introduction of the independent Planning Commission and to ensure that decision-making is expedited in the short term. Delivering major projects WIDER IMPLICATIONS FOR MINISTERIAL INVOLVEMENT Town and Country Planning call-in powers 3.41 In terms of decisions made under the Town and Country Planning Act, the Secretary of State can currently ‘call-in’ a planning application that she wishes to determine. There is no necessary conflict between having an independent Commission determine large-scale cases subject to up-front Ministerial involvement through a national Statement of Strategic Objectives, and having Ministers involved in decisions that have not been subject to such a process. Indeed, there may be a number of reasons why it could be important to retain the involvement of Ministers in certain decisions. A small number of planning applications will come forward which have regional or national implications – social, economic and/or environmental – and in some circumstances it will be difficult for a local authority to make a decision because it does not have an appropriate framework for making decisions which have regional or national spillovers. Additionally, there may be a small number of cases where exceptional circumstances necessitate a decision being taken by Government Ministers – for example on matters of national security. 3.42 This Review does not recommend that there should be a change to Ministerial decision- making under the Town and Country Planning legislation. In the future, it may be appropriate for the Government to look again at the need for Ministerial involvement in decision-making on planning applications made under the Town and Country Planning legislation. 3.43 However, there is a case for keeping the Ministerial role to a minimum. This involves further progress being made in reducing the volume of cases determined by the Secretary of State in Town and Country Planning call-ins. This would mean a rethink of the current call-in policy that Ministers apply to planning applications referred to them. A more rigorous approach should be applied to establish whether the planning application has spillovers of such importance that it warrants the intervention of Ministers. 88

Measures should be taken to limit Ministerial decision-making to only those cases where there are national or wider than local spillover effects and to reduce the time taken to decide planning applications made under the Town and Country Planning legislation. The Government should: • review the Town and Country Planning call-in directions. This should involve: • revising the Departures Directions so that it more clearly indicates that only those proposals that are at significant odds with the core strategy of a new Local Development Framework, or similarly significant provisions of the Regional Spatial Strategy, could be considered a departure. The departures thresholds should also be tightened so that only those schemes of national and strategic significance which are at odds with the development plan could lead to notification to the Secretary of State; and • reviewing other directions, in particular the Density, Greenfield and Shopping Directions and withdrawing them if no longer necessary. The overall aim should be to reduce significantly the number of cases referred to the Secretary of State for possible call-in; • review the Town and Country Planning call-in policy by the end of 2007-08 and implement tighter criteria to the cases that are subsequently called-in following referral. Call-in should be used only in exceptional circumstances for those cases where significant national or wider than local issues are raised (particularly where there is no clear framework at the regional and local level to enable appropriate decision-making to be made). The aim should be to reduce the numbers called-in by 50 per cent by 2008-09; • review the recovered appeals policy by the end of 2007-08 and so govern more strictly the appeals that are recovered, with the result that only those cases where significant national or wider than local issues are raised, are recovered for Ministerial decision; • reduce the amount of time it takes to decide whether or not to call-in an application. In particular the Government Office’s secondary target of seven weeks should be reduced to no more than five weeks; and • amend secondary legislation to remove the remaining categories of transfer excepted appeals: Listed Buildings in receipt of Grant Aid, Enforcement appeals accompanied by Environmental Statements, Tree Preservation Order appeals and Hazardous Substances appeals. This Review does not recommend that there should be a change to Ministerial decision-making under the Town and Country Planning legislation. In the future, it may be appropriate for the Government to look again at the need for Ministerial involvement in decision-making on planning applications made under the Town and Country Planning legislation. 94

The Government should consolidate the secondary legislation related to planning. A priority is to consolidate the General Development Procedure Order and its subsequent amendments – this should be undertaken in 2007. Streamlining the planning system National policy guidance 4.8 A second area of complexity relates to the volume of national policy guidance. National government has a role in setting policy guidance on issues of national importance and where the planning system is required to implement Government priorities at the local level. Local authorities tasked with implementing national policy through the planning system often welcome the weight that such guidance carries in the decision-making process. There can also be benefits from having ready-made processes and methodologies that save local authorities the effort of producing their own and can also provide a consistent approach for applicants. 4.9 The Government itself recognised in its 2002 Green Paper Planning: Delivering a Fundamental Change,2 that the level of complexity had grown too great. Some progress has been made through the move to new Planning Policy Statements. However, there are still over 830 pages of guidance, with a wide array of best practice documentation and other supporting literature; and several years after the reform process began, there are still a number of Planning Policy Guidance notes that sometimes blend policy with guidance in an unhelpful and often duplicative manner. And while there continues to be a range of forms of policy – planning guidance notes, circulars and Ministerial statements – there will be difficulties in determining the current policy on any one issue. 4.10 One option for reform would be to adopt the Welsh model, which presents planning policy statements and guidance in one document. This option, which would result in an expanded Planning Policy Statement 1 and retraction of all the other documents, has a number of attractions: • perhaps most importantly, it would allow a holistic approach to policy in a way the current range of subject-based guidance precludes. A planning system that is more responsive to prices, for example, has application across a range of subject areas, and would be more effective in a systemic document than in an individual statement; • the range of topics on which there is a genuine national interest in spatial planning is, in practice, limited (see Box 4.2) and could be contained in one document of 50-60 pages;3 • it would reduce repetition in a more radical manner than is likely to be possible in a range of documents; • it would increase certainty through its time frame – under the current system there will always be the pressure to update at least one of the long list of guidance notes, creating an uncertain policy framework for plan-making and development control; • the alternative approach – asking Government to reduce the range of guidance on an incremental basis – does not appear to have delivered; at current rates it will take seven years to update policy with little reduction in complexity; and • it would make it harder to add incrementally to the list of topics on which policy guidance was sought. 98

There should be a substantial streamlining of national policy, delivering previous commitments. The Government should publish proposals by summer 2007. This should include consideration of the potential to remove some of the current range of Planning Policy Guidance, and where necessary replace through an expanded PPS1. Any new policy should be consistent with the green paper principles of being strategic, concise and not mixing policy with guidance. Any new guidance should be published ideally alongside or otherwise within four months of publishing national policy. A desirable goal would be to reduce over 800 pages of policy to fewer than 200 pages. Streamlining the planning system 4 PLAN-MAKING 4.13 The Planning and Compulsory Purchase Act 2004 reformed the plan-making system removing a tier of plans. In summary, the statutory development plan now comprises the Regional Spatial Strategy (or the Spatial Development Strategy in London) prepared by the regional planning body and the development plan documents in the Local Development Framework (LDF) prepared by the local planning authority (LPA). 4.14 The Regional Spatial Strategy (RSS) should provide a broad development strategy for the region over the next 15 to 20 years. It should identify the scale and distribution of new housing in the region, indicate areas for regeneration, expansion or sub-regional planning and specify priorities for the environment, transport, infrastructure, economic development, agriculture, minerals and waste treatment and disposal. Most former regional planning guidance is now considered part of the new RSS and forms part of the development plan. 4.15 At local level, the district or unitary authority prepares a Local Development Framework (see Figure 4.1) that sets out, in the form of a ‘portfolio’, the local development documents which collectively deliver the spatial planning strategy for the local planning authority’s area. It includes Development Plan Documents (DPDs);4 a project planning document called the Local Development Scheme (LDS); an annual monitoring report (AMR); a document outlining the consultation process called the Statement of Community Involvement (SCI); and supplementary planning policy documents (SPDs). Plan-making at the county level, other than for waste and minerals, has been removed. 4.16 As this new system has come into operation, a widespread view has developed – at the very least – that it is experiencing ‘teething’ problems that may be rectified over time. However, many contributing to the Review expressed concerns about the apparent complexity of the system and the processes required to produce the component parts of the LDF. Even though the new system is in its early stages and there is little appetite for a fundamental review, there is an emerging consensus that the system can be improved. This section looks at measures that could be taken to help streamline some processes and reduce some of the complexity. It will not be easy to introduce change at present, however. Care will need to be taken to ensure that the current process of plan development is accelerated, rather than being thrown off course. 101

Local planning authorities and regional planning bodies should continue to develop their development plans as expeditiously as possible to provide a clear planning framework for decisions. DCLG should urgently review the regulations and guidance behind the new plan-making system to enable the next generation of development plan documents to be delivered in 18-24 months in place of the current 36-42 months, while ensuring appropriate levels of community involvement. Draft guidelines should be published by summer 2007, drawing on the views of other stakeholders including the Better Regulation Executive. This will involve: • streamlining of Sustainability Assessment (SA) processes including removing or reducing requirements where a related higher tier policy has already been subject to SA and exploring how SA requirements can be streamlined for Supplementary Planning Documents; • streamlining of Local Development Scheme processes to a short programme of intended development documentation by local planning authorities; • refashioning the Statement of Community Involvement into a corporate ‘comprehensive engagement strategy’ along with removal of the need for independent examination, as proposed in the Local Government White Paper 2006; • increasing the speed with which Supplementary Planning Documents can be delivered; • regional and local planning authorities and Inspectors should ensure that regional and local plans deliver against the original objective of being short documents that do not duplicate national policy; • the removal of a formal requirement for an issues and options phase of plan-making, leaving the Preferred Options and Submitted stage. Preferred Options should be generated via effective and focused engagement with stakeholders, especially those vital to the delivery of the plan; • a reform of the challenge provision so that if a plan or part of a plan is quashed in the Courts the plan can be amended without the plan-making process having to begin from the start; and • ensuring that the new examination in public process enables an effective scrutiny and a testing of the evidence base of policy. Local authorities should explore the potential for efficiency gains (which could be in excess of £100 million over a three-year period) to be reinvested in enhancing the quality of their planning service provision. Streamlining the planning system 4 issues can be particularly difficult for start-ups and Small and Medium-sized Enterprises (SMEs), which frequently lack knowledge and may find it difficult to afford professional services. The Royal Town and Planning Institute (RTPI) has operated its Planning Aid service as a charitable activity supported by DCLG and using over 600 volunteers to help local communities, groups and individuals who would not otherwise have access to professional planning advice. This is very successful, now helping 14,000 people and over 4,000 communities each year, with telephone casework approaching 5,000 calls. In guiding and advising its own clients, Planning Aid also reduces pressures on local planning authorities. The RTPI wants to extend this service through a social enterprise company so as to provide a comparable service for start-ups and SMEs. The RTPI is looking for business support for this, with a view to a pilot project in 2007. This could be a very helpful development. 4.27 In addition to finding mechanisms to help applicants cope with complexity, it is also important to try to streamline processes directly. A number of issues could potentially be addressed here, but two stand out: the complexities associated with the wide variety of consent regimes and the volume of paperwork associated with growing information requirements. Variety of consent regimes 4.28 Although in the public mind ‘planning permission’ is a generic regulatory requirement for the use and development of land, in practice over the past few decades a large number of separate consent regimes have grown up. These include: • core regimes of planning permission, principally under the Town and Country Planning Act 1990, and listed buildings and conservation area consents under the Planning (Listed Building and Conservation Areas) Act 1990; • other regimes of advertisement regulations consent, building regulations approval, scheduled monument consent, highway works, felling licenses, hazardous substances consent, tree preservation order consents, trees in a conservation area consent, protected hedgerow and footpath order consents; and • infrastructure regimes including for harbours development under the Harbours Act of 1964, heavy and light rail and inland waterways under the Transport and Works Act 1992, highways under the Highways Act 1980, electricity under the Electricity Act 1989, gas storage under the Gas Act 1965, pipeline construction under the Pipelines Act 1962, water infrastructure under the Water Industry Act 1991.15 4.29 The Halcrow Report, government-sponsored research conducted in 2002-04, investigated the merits of unifying twelve non-major infrastructure consents.16 The starting point for the study was that the current system involved duplication and was confusing, complex and time consuming for all concerned. With the exception of building regulations (where the legal review highlighted a number of potential problems but suggested this could be reviewed at a later date) it concluded that, in general, there were a number of benefits to be gained from merging of consents. A legal review also found that on a procedural and legislative level unification would allow EU legislation and related Environmental Impact Assessment (EIA) regulations to be built into any new regime more easily than the current array of regimes. The review was unable to quantify the scale of the likely cost savings from unification, but concluded there was no reason why all the consent regimes 109

The Government should formally commit to the gradual unification of the various consent regimes related to planning following the proposed unification of scheduled monuments and listed building consents, and should set out proposals in 2007. One option would be to bring together the heritage and planning consents. Streamlining the planning system 4.37 In terms of reducing the length or number of Environmental Statements, there are limitations to what is possible – the criteria for producing a statement and the items it must cover stem from EU Council Directive 85/337/EEC (as amended by 97/11/EC), and Departmental guidance (Circular 02/99 Environmental Impact Assessment) states that the Environmental Statements should concentrate on the ‘main’ and ‘significant’ effects and be prepared ‘without unnecessary elaboration’. However, given the scale of costs that can be imposed, regulations setting out the thresholds which trigger the requirements to produce Environmental Statements should be re-examined. 112

The Government should, as a matter of priority, work with local planning authorities and other bodies such as the Better Regulation Executive to reduce substantially the information requirements required to support planning applications. The principle should be to move towards a risk-based and proportionate approach to information requests. Action should include: • a review of the guidance on validating planning applications including the introduction of proportionality thresholds and the phasing of information required at different stages of the application process; • the introduction of strict criteria to be fulfilled by Government, regional planning bodies and local planning authorities before any additional information requirements on applicants are introduced; • an examination of the potential to raise the thresholds for EIA applications and limit the paperwork associated with Environmental Statements; • a tighter enforcement of processes aimed at ensuring that resource transfers and training provision occur before other government departments implement policy via planning; and • formal monitoring of progress based on representative samples of volumes of information, and associated costs, for like-with-like cases for both major and minor developments across a range of sectors. The first assessment should be published in 2009, benchmarking against 2006 volumes and costs.

There should be a rebalancing of the focus of planning on the cases that matter most, in line with the principles of risk-based regulation by: • a widening of permitted development rights for minor consents by extending the ‘impact’ principle of the Householder Development Consent Review, so that in future only those cases where there will be non-marginal third-party impact will require planning permission, with the objective of an appreciable reduction in volumes of applications. This should be completed within the next two years; and • the development of a voluntary new system of negotiated side-agreements between affected parties, so that where agreement can be reached a full planning application will not be required. This is likely to be most practical with smaller scale applications. The permitted development rights should also be widened to help combat climate change. In particular, proposals to extend rights to domestic microgeneration should be extended to commercial settings. 8 Planning and Advisory Service, ‘Success Stories’ at http://www.pas.gov.uk/pas/core/page.do?pageId=10389 9 The Audit Commission, The Planning System: Matching expectations and capacity (February 2006). 10 Ibid. The Audit Commission, The Planning System: Matching expectations and capacity (February 2006) pp. 53-56. Improving the performance of local planning authorities 5 that it is beneficial to involve council members at this early stage.11 Although care needs to be taken that this involvement is not prejudicial to the independence of the decision-making, it is appropriate that issues which may arise in committee are aired and discussed at an early stage so that mitigating action can be taken before an application has progressed to its last stage. Addressing such issues at a later stage adds to delays in the system. The Audit Commission identified this as one way in which pre-application discussions could be enhanced.12 5.17 Local planning authorities need further encouragement to offer pre-application discussions. At present planning fees do not fund the work involved in preparing and carrying out these discussions because they are a voluntary, not statutory, activity. Although a local planning authority can charge a fee (as per section 93 of the Local Government Act 2003), in practice local planning authorities tend to charge only the larger, commercial developer, so as not to dissuade householders and other small developers from seeking early advice. Government policy has been that planning application fees should be set at a level to allow 100 per cent cost-recovery but there continues to be some shortfall. The effect of this is exacerbated as local authorities are not compensated for the time and resource they devote to non-fee work, such as pre-application discussions, applications for listed building consent and so forth. There is, of course, a risk that many smaller applicants would resist paying extra for a pre-application discussion: the universal imposition of a new separate charge for the service could have the perverse effect of reducing demand for these useful discussions. Accordingly it may not be appropriate to create a fresh, compulsory charge under the planning fee regulations when these are reviewed in 2007, although a standard fee could be levied above a set threshold. Businesses must take a role in supporting the use of pre-application discussions by showing a willingness to participate early in the process and by submitting complete applications as a result. Roll-out of Planning Delivery Agreements 5.18 The Government has set local planning authorities targets to determine 60 per cent of major applications within 13 weeks; and both 65 per cent of minor applications and 80 per cent of other applications within 8 weeks. These targets have focused attention on the need to deliver a more efficient service, and have, in combination with the Planning Delivery Grant,13 encouraged local authorities to reform their processes to drive delivery. However, there is much concern about perverse impacts, such as applications being turned down to meet deadlines, fewer pre-application discussions and longer delays in considering conditions. Given these concerns, alternatives to the current system should now be considered to see if it is possible to enhance the speed with which planning applications are processed without compromising the quality of decisions and outcomes. 5.19 One such system is currently in pilot phase: the use of Planning Delivery Agreements. This is a process whereby the local authority and applicant discuss up front the timetable for delivery and work towards it. It has a number of potential advantages.14 It is flexible, enabling timetables to be set which are tailored to specific circumstances. It enables all major applications to be processed in a timely manner, whereas the current system tends to focus disproportionate effort on those 119

The planning application system should be made more efficient so that high quality outcomes are delivered through a value-for-money process. This should include: • more widespread use of pre-application discussions, which are often of great value to both planning departments and applicants. Where appropriate these should be used as an opportunity for early community involvement. Local authorities should charge for these only when this is unlikely to significantly reduce demand for the service; • the roll-out of Planning Delivery Agreements (PDA) to ensure all applications are dealt with in a reasonable time frame. There should be a requirement for local authorities to offer these for large applications – revising the current thresholds for ‘majors’ by separating them from medium-sized applications would help here. Where a PDA has been agreed the application would be removed from the current national targets; • a review of the statutory consultee arrangements to improve efficiency, to include consideration of the thresholds at which these bodies become involved with applications and better incentives to ensure a quicker response to enquiries; • early engagement from statutory consultees such as Natural England, the Environment Agency and English Heritage. In particular, the Highways Agency should ensure it adopts this approach rather than relying on late use of Article 14 holding powers; and • speeding up the final stages of the application process, in particular by earlier negotiation of Section 106 agreements or use of tariffs, and discharging planning conditions. Businesses should engage with pre-application discussions to enable issues to be identified at an early stage and ensure that they submit complete applications. 19 Kate Barker, Barker Review of Land Use Planning. Interim Report – Analysis (July 2002) pp. 75-76. 20 The Planning Delivery Grant (PDG) is providing about £605 million over six years (2003-08), to resource and incentivise regional planning bodies and local authorities to improve the planning system and deliver sustainable communities. Allocations are based on assessment of performance across a range of planning functions. Improving the performance of local planning authorities 5.26 In terms of additional private sector contributions, there are seven main options, although there is also a need for caution about adding further private sector costs to the planning system: • raising the cap on fees. The current national fee structures cap the fee per application at £50,000,21 but the cost of processing the largest planning applications can be very much higher. For instance, rough estimates from the City of London suggest that it costs around £100,000 to process a large office development. The cap therefore essentially represents a subsidy of large developers by the taxpayer or other commercial and residential planning applicants; • an across-the-board increase in fees. Planning fees have already risen substantially in recent years – around £68 million extra a year as a result of the most recent rises, which saw fees rise by 39 per cent on average (but in some cases by up to 350 per cent). Certain business groups argue there is a little to show for the recent rises. But calls for more resources to manage increasing demand on the planning system, raises the possibility of a further rise to more accurately reflect average costs; • a variable fee structure. At present fees are set nationally – they do not necessarily cover the cost of individual authorities, which can vary substantially, partly due to different costs of living. A flexible fee structure (or at a minimum a London premium) could address this. However, moving to a local system effectively risks requiring applicants to subsidise inefficiencies (there would be no incentive to operate an efficient service if charges could be raised to cover costs) and introducing increased complexity caused by local variation. It would also need to be subject to a cap, as the local authority is in effect a monopoly service provider; • ring-fencing of fee income. One option would be to ensure that fees which are paid for planning applications (which net £200 million a year) go to improve the planning service rather than being used in the local authority more widely. There is a strong case for this – the fee is for a service and is not an additional form of taxation. But hypothecation goes against the grain of wider reforms to local government. As money is fungible, there is also no way to stop local authority finance departments reducing the funding they provide to planning even if fee income is ring-fenced; • allowing charges for a premium service. Many public services now have differential tariffs according to the quality of service that is desired. The Passport Agency, for example, charges £91 for a premium one-day service and £66 for a standard three-week service on adult passports. In planning, however, there is a still a ‘one size fits all’ approach. This means that those who value a higher quality or faster service are not able to procure for it; • allowing applicants to buy in extra resources. A more flexible approach to the above would be to allow applicants to pay for extra resources when needed. There are some instances where this has already happened, but they are not widespread. There are particular grounds for this where, for example, a small authority receives a large one-off application that it simply does not have the resource to finance. It could, however, give the impression of ‘buying’ planning permission and care would need to be taken to ensure this did not occur by ensuring that the payment went to the local planning authority or some accredited agency rather than directly to the consultants. Planning Advisory Service (PAS) or Advisory Team for Large Applications (ATLAS) could be used as an intermediary, or ‘blind trusts’ could be used, where the developer pays money into a trust that the local authority controls. Whichever approach was adopted, care would need to be taken to ensure this process did not become anti-competitive through favouring large, incumbent firms; and Private sector options 124

The Statement of General Principles should be revised to make clear that in determining planning applications, due regard should be paid to the economic, social and environmental benefits of development, such as the benefits new development can bring through low average energy consumption, alongside other material considerations. 17 ODPM Planning for Economic Development (2004) p. 8. 18 EMDA, Response to K. Barker, Barker Review of Land Use Planning: Interim Report (2006). 19 ODPM Planning for Economic Development (2004) p. 11. A more responsive planning system 1.18 The primary objective of this update should be to emphasise the importance of sustainable economic growth to individuals and communities and of the planning system seeking to enable such growth, in accordance with PPS1 principles. The productivity drivers of growth (investment, innovation, competition, enterprise and skills) should receive full attention in both plan-making and decision-making to allow a positive approach to new development which focuses on enabling proposals. By making explicit that sustainable economic growth is a necessary objective for all development plans, it should stress that planning must take full account of the direct and indirect benefits that may accrue from development, such as innovation, more employment opportunities, and a wider choice of retail and leisure services. Benefits and costs which fall beyond the boundaries of the determining authority still require factoring into decisions. It should also emphasise how development can promote wider social and environmental goals. Only one paragraph of current PPG4 is devoted to the need for a positive approach to development control and much of the rest of the document focuses on environmental and locational constraints now covered in other policy statements. 1.19 In addition, this national policy should reflect the need for planning to be more responsive to changing circumstances, due to an increased rate of economic change driven by technological innovation and globalisation. This implies including: • an emphasis on the changing nature of the economy and employment. Planning needs to take better account of the changing economy. There has been substantial growth in the retail sector, for example, but the use class for allocating land for use as shops is different from the use class for businesses, meaning that the employment benefits of the retail sector may not be fully reflected in local development documents.20 Equally, increased live–work uses mean that the boundaries between housing and employment use classes are now blurred, particularly for start-up firms. And the decline of the agricultural sector means that planning needs to play its role in supporting rural diversification to enhance the quality of life of those living in the countryside, rather than acting as an impediment to this change; 22

The Government should review current resource arrangements for local planning authorities, related authority services (such as conservation) and key agencies. This should take account of the efficiency gains to be derived from other recommendations. In particular it should explore: • raising the £50,000 threshold for fee payments on a tapered basis; • making it easier for applicants to pay for a premium service or to pay for additional resource/consultants to help process their application expeditiously, if this can be done in a manner that avoids anti-competitive effects; and • maintaining a form of Planning Delivery Grant beyond 2007-08, ensuring some form of benefit for commercial speed and delivery outcomes alongside other goals. Any fee increase should only be allowed on the basis of a clear mechanism for indicating the higher quality of service that will be delivered as a result. 23 See, for example, Local Government Association and Office of the Deputy Prime Minister, Skills Base in the Planning System (November 2004) and Tim Edmundson, Planning Research, An investigation of potential measures to address London Local Planning Authorities’ recruitment and retention problems (April 2004). 24 The Academy for Sustainable Communities (ASC) is a new national and international centre of excellence for the skills and knowledge needed to create communities fit for the 21st century. The ASC’s focus is on increasing skills and learning, targeting skills shortages and sharing knowledge and expertise. http://www.ascskills.org.uk/pages/about-ASC Improving the performance of local planning authorities 5 5.33 These actions may therefore not prove sufficient. Some potential solutions raise wider sets of issues. Skills may be closely bound to broader issues of local authority empowerment. Allowing planning services more autonomy could increase the status of the work, thus making it easier to attract and retain high skilled employees. Empowerment is being addressed in other areas of government, most notably the Lyons Inquiry into Local Government.25 Within the remit of this Review the main areas for further action are: • incentivising local authorities. There are currently few financial incentives for local authorities to adopt growth strategies. If incentives could be aligned so that authorities received better returns from growing their tax base, this would raise the status of planning within the authorities, and potentially the attractiveness of planning as a career. Incentives are explored more fully in Chapter 7; • improving perception of planning as a career. For at least the past two decades, the perception of planning as a profession has been relatively low and has slipped down the list of desirable places to work within local authorities. Some progress is being made, good planning schools can now require a minimum of a 2.1 degree for postgraduate courses. Further progress could involve partnership work at a national level between the Local Government Association (LGA), the Royal Town Planning Institute (RTPI), and the Town and Country Planning Association to ensure a continued focus on recruiting new entrants into the profession. At the local level, planning departments need to improve job design and offer more opportunity for progression. Where this is currently happening it is showing positive outcomes in terms of retention and service quality.26 One option here would involve making the chief planner a more central post within the local authority. This is something that the Local Government White Paper (LGWP) supports: ‘we encourage local authorities to make planning a prime responsibility of one of the corporate directors who should be professionally qualified’;27 • encourage or require more business process reviews. It is also key to ensure that the current available skills are utilised effectively. A number of studies have concluded that non-planners can do more of the basic work. Simple householder applications, for example, could be dealt with by relatively unqualified staff, freeing up resource for use elsewhere. The best authorities are already doing this. However, the investigations for this review28 suggest that for some poorly performing authorities there could be scope for reorganisation of work. In addition, the processes by which the planning department is integrated within the local authority should be reviewed to ensure that all strategic areas are working closely on spatial outcomes. While the Planning Advisory Service and Audit Commission are already doing some good work on leadership, more can be done. Best Value Reviews, Comprehensive Performance Assessment, user-friendly guides, an efficiency award or a team of consultants could be further useful approaches; • enhance scale economies. Many local authorities are too small to exploit fully economies of scale. However, this can be addressed by pooling resources between authorities, which is currently not a widespread practice among local planning 127

The skills of decision-makers and others involved with the planning system should be enhanced and more effectively utilised. To achieve this: • the Government should ensure continued funding for the Planning Advisory Service to promote continuous improvement, raise underperformance and facilitate joint working; • the Government should work with the RTPI, TCPA and other bodies to ensure a continued focus on getting new entrants into the profession. Postgraduate bursaries funded by DCLG should be tied to a number of years of public sector service, so that a return is provided for the public purse; • the Government should raise the status of the Chief Planner within local authorities, potentially on a statutory basis, to reinforce the status of the profession for all parties, including members; • wider use of business process reviews and best practice guidance to ensure that the time of more qualified planners is freed up to focus on the most complex cases; • compulsory training should be provided for planning committee members, focusing resources in the first instance on new members, with increased training for officers; and • the LGA and POS should establish a change management strategy/programme to help deliver culture change in local authorities.

Local planning authorities should enhance the quality of service provided by their planning department through more effective interaction with external organisations, via: • the introduction of more ‘shared services’ by local authority planning departments (or contracting to more efficient LPAs) to enable economies of scale and scope; • increased use of outsourcing and tendering for development control services, so that private sector expertise is more effectively leveraged; and • exploring the potential for greater use of accredited consultants to carry out technical assessments for selected tasks should be considered. The Government should also expand the role of ATLAS both in scope, to remove bottlenecks in the delivery of large commercial development as well as housing developments, and in geographic range, so that the benefits of this model can be felt beyond southern regions. Improving the performance of local planning authorities Addressing continuing poor performance 5.35 A robust response to local authority performance that is poor is also likely to be an important factor in improving standards. A good quality of life in local communities is supported by excellent planning services. Heavy-handed forms of central government intervention should always be used with caution but the necessary corollary of increased local authority autonomy is that there will be variability in performance and persistent poor quality performance within local authority planning departments must be addressed. 5.36 The recent Local Government White Paper sets out a general approach whereby the response to poor performance is tailored to the severity of the problem, suggesting seven processes for tackling poor performance: 1. sectoral improvement support: support and advice from within the local government sector and other sectors involved with local service delivery; 2. Government Office coordination: where underperformance is not being appropriately addressed Government Offices may intervene, coordinating and monitoring the action taken; 3. inspection: the need for targeted inspection will be determined by inspectorates, usually as part of the annual risk assessment; 4. referral to the Secretary of State: if problems are severe the Secretary of State may decide to intervene formally; 5. improvement notices: these will be introduced to address significant or enduring underperformance in a single body or across partnerships; 6. directive action: in cases where more directive action is required the appropriate Secretary of State, taking advice from Government Offices, other relevant bodies and Inspectorates may direct the organisation to take some specific action; and 7. removal of functions: this option is the most extreme step on the ladder of improvement support and intervention, and is only proposed to help tackle the most serious circumstances. 5.37 In many respects this builds on the approach that has been taken to planning in recent years, with those local planning authorities failing to improve being identified as ‘Standards Authorities’ subject to investigation and close monitoring by Government Offices. Support in identifying and tackling problems and in building capacity has been provided by the Planning Advisory Service. This ‘carrot and stick’ model has much to commend it. 5.38 The priority for the future will be to develop this approach, using increasingly effective options for intervention. In line with the White Paper, this means (in particular) developing better sector-led approaches to providing support and tackling underperformance at the earliest possible stage. The experience of the Planning Advisory Service provides a firm basis on which to build. Where performance remains poor in spite of sector-led support, a strong case for Government to act exists. In 2004-05, for example, the Chief Executives of persistently poorly performing local authorities were invited to discuss their improvement programmes with senior government officials and, in some cases, subsequently with Ministers. This approach appears to have produced results, providing a good case for adopting it again in 2007-08 – when the proposed new performance framework for local government will not yet be in place. 130

A robust system of performance management should be put in place to address continued poor performance, in line with proposals in the Local Government White Paper. DCLG should: • conduct a review of measures to judge effectiveness of planning departments in the context of local government reform. A review should consider how best to measure the quality of service provided by the planning system, including consideration of development outcome measures and labour productivity figures, alongside a greater emphasis on customer satisfaction survey evidence. In addition, the end-to-end time taken to process the larger applications that fall outside current targets should be included in the DCLG annual publication of development management statistics; • encourage the development of stronger sector-led support and intervention models; • use the new performance framework to set improvement targets in the worst performing authorities; and • encourage and, where necessary, direct local authorities that continue to underperform to tender their planning function, along the lines of the successful Urban Vision model or to contract with other more successful authorities to provide or share services. For 2007-08, DCLG should require the chief executives of persistent poor performers to discuss improvement programmes with senior officials and, where appropriate, Ministers. 32 CABE, The Cost of Bad Design (2006). 33 CABE, The Impact of Office Design on Business Performances (2005). 34 DETR, CABE and UCL Bartlett School of Planning, The Value of Urban Design (2001). The report found that good urban design adds value though producing high returns on investment and reducing management, maintenance, energy and security costs. 35 CABE, The Cost of Bad Design (2006). Improving the performance of local planning authorities 5 areas and the delivery of affordable housing. The Government’s policies on urban design are set out in Planning Policy Statement 1: Delivering Sustainable Development which states that good design is indivisible from good planning, and that planning authorities should plan positively for the achievement of high- quality and inclusive design for all development, including individual buildings, public and private spaces and wider area development; • Local Development Frameworks and non-statutory planning documents (such as masterplans and site briefs) provide opportunities for local planning authorities to embed local design policies that reflect the distinctiveness of particular areas and sites; • Design and Access Statements which explain the design rationale behind a planning application have been introduced in an effort to raise the quality of the design proposal being placed before the local authority.36 They are required on both outline and full applications for all development proposals and should show that the applicant has thought about how their proposal will help to create well-designed accessible and safer places;37 • Design Codes are one way to secure high-quality design across a spatial form. Encouraged by DCLG, urban coding has been applied at Upton in Northamptonshire to provide a consistency of design across new developments without imposing uniformity. Pilot schemes suggest that these can have a positive impact on the quality of outcomes.38 However, they are not uncontentious and should not be applied in ways which result in formulaic design responses or stifle design creativity. Government evaluation has noted that design codes are delivery tools and not ‘vision-making’.39 In the circumstances where they are useful – such as masterplanning – it is important that they are flexible and able to develop over time. Local planning authorities should work with architects alongside urban designers and other built environment professionals in the development of individual codes; • the Design Review Panel run by CABE has been acknowledged as a success improving the quality of the schemes presented to it.40 The Panel offers expert advice and assessments of schemes that will have a significant impact on their environment. This includes schemes of national importance, which have a significant impact on the local environment, or which set standards for future development. The schemes vary greatly in type and size, ranging from tall buildings in city centres and major masterplans to smaller proposals for public buildings such as arts venues and schools; and • design commissions such as the commission into affordable housing design in the Thames Gateway. This will draw together stakeholders from across the Gateway to deliver a document that will specify design standards to apply to all Housing Corporation-funded properties developed in the Gateway. The aim is to set a high standard that all providers of affordable housing must meet. 133

Decision-makers should give higher priority to ensuring that new development has high design standards – both for function and appearance: • design coding may be used strategically and carefully in the context of master-planning to assist good design. Care is needed to ensure that design codes do not become formulaic or exclude contemporary architecture so that innovation and originality are restricted; • pre-application discussions should be acknowledged as one tool in ensuring good design; • design champions with high-level skills and expertise should be encouraged at all levels; • design review panels should be facilitated at the local level and integrated within the pre-application discussion process; and • local planning authorities and Inspectors should be encouraged to turn down poorly-designed proposals, particularly where the costs of bad design will be high. 41 Lord Rodgers and the Urban Task Force, Towards an Urban Renaissance (London, 1999): ‘the poor quality of the urban environment has contributed to the exodus from English towns and cities ... we have tolerated [too long] a lazy over-use of off-the-peg designs and layouts’ (pp. 39, 51); CABE, Housing Audit: Assessing the Design Quality of New Homes in the North East, North West and Yorkshire and Humber (London, 2005). 42 According to RTPI, A Survey of Discipline Knowledge and Generic Skills of RTPI Corporate Members (2005), 62 per cent of members desired further development of their knowledge on design awareness and appreciation and urban design. 43 See J. Tirole, The Theory of Industrial Organisation, (1989) for an exposition of how, when there is market power, the unregulated monopolist may supply too little (or too much) quality depending on whether the marginal willingness to pay for quality by the marginal consumer is lower (or higher) than the average willingness to pay of the group of consumers. 44 Urban Task Force, Towards a Strong Urban Renaissance (London, 2005), p. 6.

DCLG should establish a planning mediation service to act as an alternative dispute resolution mechanism within the planning system. PINS should also explore further means of reducing the demand for the appeals system. This should include greater use of powers to charge for unreasonable behaviour leading to unnecessary expenses. Enhancing the appeals process 6 planning process with the Human Rights Act 1998. This is not a reform to pursue in the short term, to avoid uncertainty during the current round of local plans. In the short term it is more critical to reduce the number and volume of development plan documents. As set out in Chapter 4, it appears that local authorities have been too ambitious in their commitment to producing more, and more complex, development plan documents than the system requires of them. This results in more resource being taken up in judging whether or not they are sound. Table 6.1: Percentage of Inspectorate resource spent on appeals, plans and other activity 2001-06 2001-02 2002-03 2003-04 2004-05 2005-06 Planning Appeals 46 42 Development Plans 10 11 All other activities 44 44 Source: Planning Inspectorate. 6.19 Part of the solution here is the removal of the requirement for the Statement of Community Involvement (SCI) to be independently examined by the Planning Inspectorate. Public participation in the planning system is essential, but it is not clear that this system has resulted in improved participation. While the resource pressures from this original requirement will reduce next year as local authorities put their first Statements in place, any subsequent revisions will, under the current system, need to go to the Inspectorate for approval. The resource savings here would only be relatively modest. However, in the context of wider pressures this is not a good use of the Inspectorate’s limited resources, a position that is endorsed by nearly all stakeholder groups, including the Planning Officers Society and the Royal Town Planning Institute. Integrating the SCI into a broader corporate approach to community involvement should prove to be a more effective means of delivering community involvement. The announcement in the Local Government White Paper 2006 regarding repealing the inspection requirement for SCIs and calling for local authorities to draw up corporate engagement strategies is therefore welcome. IMPROVING EFFICIENCY Continuing to drive productivity gains 6.20 The Planning Inspectorate has already made considerable productivity gains, including the realignment of programmes of work which the Inspectors undertake each week to provide more intensive programmes of hearings in the same local authority. An initiative to bring together shorter sessional hearings to allow an Inspector to work in a single local planning authority area for a week is being rolled out following successful piloting. The Inspectorate is also introducing a range of improvements to the administrative processing of case work and to the full range of critical support services, while a number of further options for reform are also being considered, including rewards for continuing productivity improvements. These are all welcome initiatives. 141

The Department of Communities and Local Government should reduce the non-appeal demands made on the Planning Inspectorate. This should include working with local planning authorities to reduce both the number and the length and complexity of their development plan documents, so that there is a reduction in the proportion of resources devoted to testing their soundness. Enhancing the appeals process 6.21 However, it is questionable whether these will prove to be sufficient. Over recent years efficiency gains of 9 per cent a year have been delivered. Given rising workloads, the likelihood is that these improvements will only manage to maintain the current levels of service provided by the Inspectorate, rather than result in the required step-change in performance. Determining the most efficient appeal route 6.22 In this context, the ability of the Inspectorate to determine the route of appeal is significant. There are three means whereby an appeal can proceed: written evidence, oral hearing and public inquiry, and there are substantially different resource implications with regard to the option chosen. Hearings are 3.2 times more expensive to conduct than written cases measured by days of effort, while local inquiries are 8.3 times as expensive (see Table 6.2). The proportion of the annual workload that is attributed to each route therefore has major implications for the efficiency of the service the Inspectorate is able to provide. Table 6.2: Inspector resource usage on Section 78 work 1 August 2005 to 31 July 2006 by procedure Procedure Number of jobs Days’ effort Written Representations 16,527 16,628 Hearings 2,876 9,139 Local Inquiries 8,301 Totals 20,398 34,068 Source: Planning Inspectorate. 6.23 Within the context of a statutory right to be heard, the Planning Inspectorate encourages the least resource intensive option when it is appropriate, and has been running, for planning appeals, an initiative over the past two years to encourage parties to change from hearings where PINS consider that the case does not need to be the subject of a hearing. This has been achieved by setting out criteria against which PINS advises parties that, unless it hears from them within a set period, their case will be dealt with by written representations. This has been successful. In the 24 months that it has been running, PINS identified over 2,800 cases where a hearing was requested that could appropriately be handled by written representations. Of these, almost 1,000 subsequently went ahead as written representations. 6.24 However, there were still a large number of cases (almost an additional 1,700) that the Inspectorate judged could be dealt with by written representations, but as it could only request a change, had no power to take further action. If the Inspectorate had the power to determine the procedure, as is being proposed in Scotland, this could result in substantial efficiency savings.9 Estimates for how much could be saved by moving inquiries to hearings or written representations are less robust, but it could be around 10 per cent if one-day public inquiries could be conducted by hearings and a further 5 per cent by written representations. In total, therefore, this could substantially increase the efficiency of the process so that appellants would receive a better, faster service by having resources targeted where most needed. Assessments can often just as effectively be made via written representations as inquiry and hearing – they are not an inferior appeal method. 6.25 To make this change would require amending primary legislation under section 79(2) of the TCPA (1990). It is believed to be consistent with Article 6a of the European Convention on Human Rights, enshrined in UK law through the Human Rights Act; it does not appear that the 142

There should be a series of reforms to improve the efficiency of the appeals system. These should include: • PINS setting out further proposals for how to increase the productivity of Inspectors, including ensuring appropriate use of support staff to free up Inspector resource; • PINS being granted the right to determine the appeal route with a requirement to publish clear criteria for how this new power will be exercised; and • DCLG revising regulations on appeal processes to reduce the potential for ‘case-creep’. This would limit the issues and material considered to those that were before the local authority when it made its decision, subject to the Inspector retaining the power to ask for additional information as he or she sees fit in order to make a proper decision. Enhancing the appeals process ENHANCING RESOURCES 6.28 In the context of sustained rising demand for a service, a public body responsible for its discharge needs to have the funds to enable it do so expeditiously. While there has been a 60 per cent rise in the number of appeals between 1999 and 2005, there has been only a 37 per cent rise in the amount of PINS funding, while additional non-appeal burdens have also been placed on the Inspectorate. Despite the proportion of PINS resource devoted to appeals remaining stable, and a growth in the number of Inspectors, there are still resource pressures, with the average resource per appeal falling from £1,590 in 1999-2000 to £1,400 in 2005-06 (although in part this may be due to welcome productivity gains). 6.29 Recruiting more Inspectors is not a risk-free exercise. Salaried Inspectors are recruited from a limited labour pool shared by local planning authorities. Increasing Inspectorate resource could, over the short-term, have implications for the quality of plan-making and development control at local authority level. This is particularly the case given that the Planning Inspectorate already has to recruit to maintain current numbers, as a significant proportion of existing Inspectors are reaching an age at which they wish to work only part time or retire. Equally, it is not a ‘quick fix’ solution: recruiting and training highly qualified Inspectors takes time, and in the short term can in fact divert attention away from case-work activity. But, if a step-change in performance is required, this is unlikely to be achieved simply through efficiency savings, particularly in the context of rising workloads. An investment of around £3.5 million could provide an extra 57 salaried Inspectors which, on top of the efficiency gains listed above, would result in a further 9,300 Inspector days available to process appeals (disregarding the cost and time to train them). If targeted purely on appeals, it would represent an extra resource gain of over 10 per cent in additon to the overall total Section 78 English planning appeal cost of £30.1 million in 2005-06. Given the prevalence of delay, this would be expected to produce considerable economic returns from faster decision-making. 6.30 There are two possible methods of funding this extra resource. One would be through increased central government funding, drawn either from the efficiency savings derived from other recommendations in this report, the Planning Delivery Grant, or additional Exchequer funding. The second would be through additional private sector contributions. There is power to recover the Minister’s costs (and hence PINS costs) for Inquiries in section 250(4) of the Local Government Act 1972 and section 42 of the Housing and Planning Act 1986. Under these powers 144

Issues relating to the resourcing of PINS should be explored by: • considering the case for an additional £2 million of public funding for appeals conditional on the overall proportion of PINS funding on appeal work not being scaled back and on the delivery of stricter performance targets; • introducing new powers to allow PINS to recover wasted administrative costs; and • the introduction of cost-recovery for foregone expenses as a result of withdrawn appeals, which could result in up to £1.5 million per year, to be used for appeals. Enhancing the appeals process 6.33 As a minimum, this would involve returning to the previous targets that were so far from being met they required revision. For 2004-05 the targets had been for 80 per cent of all written representations to be determined within 16 weeks, and 80 per cent of all hearings and inquiries within 30, but this may be insufficiently ambitious. If local authorities are expected to process household developments within eight weeks, why should it take the appeals system twice as long? It should be possible for 80 per cent of written representations to be conducted in eight weeks, and for the great majority of hearings and inquiries to be conducted within four to five months. There is also a strong case for an additional goal from 2008-09 that no appeal case should take more than six months, to provide greater clarity of timescales for cases that fall outside these targets. Where exceptional circumstances arise that mean it is necessary to go beyond this six- month period, PINS should publicly state the reasons for this (which may include appellants or third parties not being able to meet the agreed timetable). Achieving these new performance targets would be highly dependent on delivery of the changes outlined above and, notably, changes in the behaviour of the parties. It is also necessary to phase the introduction of tighter targets in the light of the high demands that will be made on PINS in 2007-08 resulting from testing the soundness of development plan documents. 146

As a result of the efficiency and resource measures outlined, the targets for appeals processing should be tightened to bring about a step-change in performance: • the targets for 2007-08 should include a new requirement that 80 per cent of all written representations will be dealt within 16 weeks; • the targets for 2008-09 should state that 80 per cent of written representations should be conducted within eight weeks and 80 per cent of all hearings within 16 weeks. Inquiries should be subject to bespoke timetabling, with 80 per cent conducted within 22 weeks; and • from 2008-09 all appeals should be processed within six months. Where it proves necessary to extend this period the Planning Inspectorate should make a public statement setting out the reasons for the delay (which may include appellants or other parties not being ready to meet timescales).

DCLG should update its national planning policy on economic development by the end of 2007. This should include: • emphasising the critical role economic development often plays in support of wider social and environmental goals, such as regeneration; • strengthening the consideration given to economic factors in planning policy, so that the range of direct and indirect benefits of development are fully factored into plan-making and decision-making alongside consideration of any potential costs; • emphasising the role that market signals, including price signals, can play in ensuring an efficient use of land, both in plan-making and in development management; • requiring a positive approach to applications for changes to use class where there is no likelihood of demonstrable harm, to provide greater flexibility of use in the context of rapid changes in market conditions; • making clear that where a Core Strategy is in place, decisions on commercial development should not be delayed simply on the basis of prematurity; • ensuring that development in rural communities is not unduly restrained and allows for a wide range of economic activity; and • ensuring that in general a more positive approach is taken to applications for tall buildings where they are of very high design quality and appropriately located, and where there is the transport infrastructure to support them. 24 Frontier Economics, Regional Growth: A report prepared for ODPM, HM Treasury and DTI (2004) p. 2. 25 English Heritage, Heritage Under Pressure available at www.english-heritage.org.uk/heritage/underpressure. A more responsive planning system 1 • delivering the recommendations of the Heritage Protection Review, in particular in terms of improved identification of what is significant about a building; • making clearer in policy the importance of economic reality. For example, if a new doorway in an historic building could make a scheme that would rescue a building viable, this should be looked upon favourably. Keeping buildings in active use can be the best means of preservation; • ensuring proportionality: planning controls that would be appropriate for a Grade 1 building should not be applied without discrimination to a Grade 2 building; controls should reflect the grading and importance of the building identified. Local conservation officers should adopt a response to proposals to change listed buildings that reflects the size of the change and the internal and external impact of the change; • re-examining uniform coverage of tree preservation within conservation areas through active use of conservation area character studies; • using Heritage Partnership Agreements more widely to protect national heritage by upfront agreement rather than individual applications; and • considering the advantages of introducing partial or external listing in a way that does not add complexity so that only the part of the building that is of architectural and historic interest is protected. 1.25 There is no doubt that climate change is one of the greatest challenges facing public policy makers today. Ensuring that the planning system plays its role in helping with mitigation and adaptation is therefore an important priority. Given the nature and scale of the challenge, it is critical that the most effective and efficient policy levers are used in seeking to address climate change. In this context, it is important that the planning system is not asked to bear a disproportionate weight of the overall approach to this issue. In terms of transport emissions, for example, the evidence on the link between urban form and emissions is complex and contested, while planning often influences behaviour indirectly: requiring a site to be accessible by public transport does not mean that it will in fact be accessed in that way. Similarly, in terms of energy efficient building design, the planning system can only influence the small percentage (around 1 per cent for housing) of new stock each year and some renovations – though in the medium term this will impact on a sizeable proportion of total stock. Pricing mechanisms, on the other hand, could result in widespread behavioural change in even the short term and do so in a direct way by altering incentives. They may therefore be more efficient and effective tools for mitigating climate change impact. 1.26 Moving forward, the Government therefore needs to consider the right balance between these mechanisms. The Stern Review on The Economics of Climate Change points out that policies will be more efficient if they encourage private individuals and firms to take explicit account of the economic costs of climate change in their decision-making, rather than simply imposing prescriptive design standards.26 Where there is a key role for carbon-efficient design of buildings it is also important to ensure that the relationship between building regulations and planning is firmly established, and that the tools for achieving desired outcomes are not overly prescribed: firms should be free to use whichever tool is most appropriate to deliver their desired outcome. Climate change – mitigation 27

That Government considers, in the context of the Lyons Inquiry into Local Government, further fiscal options to ensure that local authorities have the right fiscal incentives to promote local economic growth. 25 86 per cent of surveyed councils cited the possibility of council tax limitations as the greatest barrier to using prudential borrowing. Improving incentives 7 7.20 Critically, the contention is not that developers must compensate directly for any loss of welfare. This would produce a number of problems, not least the incentive to mislead about the scale of harm caused in order to maximise the compensation payment, perversely increasing opposition to development. Further, it would not be right to establish the principle that development necessarily has adverse effects, or that any that do exist should always be compensated. It could also cause difficulties in terms of potential interaction with Section 106 and PGS. It is rather that those developers who choose to offer good-will payments to individuals – most likely in the form of standardised payments – in order to gain wider acceptance of their scheme should not face unnecessary restrictions on doing so. There will be some who will be unwilling to accept the development at any price; these can continue to respond to consultation processes setting out the reasons for their objection, and the planning system would continue to ensure that the applications were properly assessed on planning grounds whatever the nature and extent of the opposition. 155

Business should make use of the potential to offer direct community good-will payments on a voluntary basis when this may help to facilitate development. 32 P. Klemperer, ‘How (Not) to Run Auctions: the European 3G telecoms auctions’, European Economic Review (2002), at http://www.nuff.ox.ac.uk/Economics/papers/2002/w5/runauction.pdf

That DCLG publish a progress report on delivery against these recommendations by the end of 2009, drawing on the views of key stakeholders and users of the planning system. 170

Wider planning policy should be made more responsive to economic factors. This should include: • building on the more flexible approach to car-parking spaces for housing, by applying this less prescriptive approach to commercial development in place of the current national maximum standards per square metre of floor space; • ensuring that any review of heritage policy builds on the recent reforms of the Heritage Review, by emphasising the critical importance of viability and proportionality, and by facilitating modernisation that does not damage the historic or architectural significance of buildings; • supporting the town centre first policy and the impact and sequential tests that help to deliver it, but removing the requirement to demonstrate need (the ‘needs test’) as part of the planning application process; and • if the Competition Commission concludes that there is a problem relating to the exercise of local monopoly power as part of its current grocery inquiry, to establish how best to address these issues, either through planning or through other means. In general, there is the need to establish a more robust evidence base for national policy, so that the costs and benefits of the policy can be better assessed. Furthermore, the Government should ensure that planning is used as a tool for delivering policy only when it is an appropriate lever and provides an efficient and effective means of delivering objectives. 43 DCLG Planning Policy Statement 1: Delivering Sustainable Development (2005). 44 Directive 2000/60/EC of the European Parliament and the Council of 23 October 2000 establishing a framework for community action in the field of water policy. Official Journal L 327, 20 12 2000. A more responsive planning system 1 1.41 Additional EU environmental legislation raises the question of the balance of planning considerations in sustainable development between environmental and resource protection and social and economic needs: it is important to ensure that balance is retained. This is expressly the case in the protection of habitats, species and natural resources. The Department of Environment, Food and Rural Affairs (DEFRA), on behalf of the UK Government, must therefore be alert to this issue from the outset of its discussions with the European Commission and in negotiations with the European Parliament and in the Council of Ministers. The UK’s negotiating remit should take full account of the costs to developers and the economy of the additional burden emerging proposals would place on the development process. Negotiators should also press the Commission for full assessments of the impacts of new proposals, in line with the Lisbon agenda, and of amendments proposed by the Parliament that would impose new burdens. Joined-up government in this area is of particular importance if desired outcomes are to be achieved. PLAN-MAKING 1.42 New national policy on economic development will improve the context for the functioning of development plans. In addition to this, the framework and content of Regional Spatial Strategies (RSSs) and local development plan documents – the primary determinant for decision-making – need to enable the system to respond better to the needs of business. 33

The Government should engage more proactively at the policy development stage of European legislation with a potential planning impact. DCLG should resource and maintain close links with DEFRA, FCO and UKREP in particular, and other departments as necessary, in anticipating the domestic planning implications of emerging EU legislation. All departments should ensure that their negotiators fully take into account the implications of proposals for planning legislation, policy and the resulting outcomes for future development. Additions to existing domestic regulation should be avoided except where needed to address remaining areas of market failure. Where possible, transposition should use existing regulatory mechanisms. A more responsive planning system Enhanced focus on economic development in plans 1.43 The key conclusion of the Interim Report that this chapter seeks to address is the need for the planning system to be more responsive to changing economic circumstances and to balance each of the components of sustainable development. The following points should be considered in the preparation of development plan documents. Policies should consider how the drivers of productivity can be supported and core strategies should focus on sustainable development outcomes and not contain unnecessarily detailed policies – for example, in terms of energy efficiency, policies should aim to reduce the carbon footprint and leave the means of achieving this open. In addition, land uses should not be disproportionately restricted. Mixed-use development is increasingly appropriate in a country based on services rather than heavy industry, and rigid land use classifications can be unjustified.45 It will be important to use the test of soundness to ensure plans are sufficiently flexible. Ensuring that there is a proportionate use of local protected area classifications is important in this context – there is a robust network of national protected areas, and excessive adoption of local classifications not only adds to complexity but also may unduly constrain the potential to deliver sustainable economic development. 1.44 Development plans do not impact on economic development only through land use designation. They should also highlight the benefits that employment and investment can bring to an area, and identify how these benefits can be realised in their region or locality. To do this successfully will mean taking business interests into account as development plan documents are prepared, though care needs to be taken to ensure that the policies do not simply reflect the views of large or incumbent firms over those of small to medium-sized enterprises (SMEs) or firms who are not currently represented in the area. 1.45 Current guidance on preparation of development plans already suggests engagement with businesses in preparing documents.46 But further progress needs to be made. Current practice could be improved through: • a stronger role for intermediary organisations, focus groups and business action groups; • closer cooperation between planning departments and economic development units; • increased importance of role for Local Strategic Partnerships (LSPs); and • training planning officers and committee members to understand better the imperatives of business, particularly the locational needs of businesses and business planning.47 1.46 There is, in addition, a case for amending guidance to ensure that planning authorities are obliged to engage with the business community as a vital part of local communities, to balance the components of sustainable development and ensure that development plan documents focus on outcomes. This would make it clearer that one of the key aims of the new planning system is the delivery of outcomes that help to support economic growth. Supporting productivity 34

Regional and local planning authorities should make planning for economic development a higher priority. To achieve this there should be: • better integration of the Regional Economic Strategies (RES) and Regional Spatial Strategies (RSS), including enhanced alignment of timescales and compatibility of evidence bases, so that the RES can fulfil its role of informing the RSS. The Secretary of State should have regard to RES policies as part of her adoption procedures for the RSS; • policies that set out how the drivers of productivity (competition, investment, skills, innovation and enterprise) will be supported. Care should be taken to ensure that plans represent the interests of small firms and potential new entrants to the market (who may not be in a position to engage with the plan); • policies that focus, wherever possible, on desired outcomes rather than imposing the means of delivering those outcomes – for example in terms of climate change – the outcome should be to reduce the carbon footprint, with the best means being flexible; • a stronger link between plans and infrastructure provision, so that there is greater confidence that the infrastructure necessary to deliver large development will be in place; • a marked reduction in the extent to which sites are designated for single or restricted use classes – the need to ensure provision for live–work units is relevant in this context; • where employment land needs to be separately designated, ensuring that employment land reviews are conducted regularly, making full use of market signals, so that there is a suitable range of quality sites which provide for all sectors and sizes of firm; and • delivery of the Government’s objective of avoiding rigid local landscape designations in the context of a robust network established at national level. A more responsive planning system 1 1.56 The Interim Report identified the critical relationship between outcomes of the planning system and the level of government at which planning decisions are taken, building on the principle of subsidiarity in which government is devolved to the most effective level. Benefits of development such as employment opportunities and community facilities are felt across local- authority boundaries. But the costs of development, for example temporary traffic disruption or loss of amenity, can be locally concentrated. So, although local development documents must be in accordance with the RSS, there is still an inadequate incentive for local decision-makers to take this wider interest fully into account and decisions are not always made by those representing the full area in which the development impacts are experienced. This suggests it would be desirable to develop alternative models for decision-making on applications for strategically important developments which affect an area larger than a local planning authority (this principle is also developed in Chapter 3 on Delivering Major Projects). 1.57 Under the current system, there are national, regional and local plan-making bodies. But, with the exception of London, there are only local and national decision-making bodies, though regional planning bodies can outline the strategic developments on which they would like to be consulted when they come forward.56 It can be argued that the benefits of more strategic decision- making could be felt in other areas.57 1.58 There is a range of suggestions for how administrative structures can better reflect functional economic areas and an increased interest in the role that cities play in driving growth.58 Travel-to-work areas (sometimes referred to as city regions), which are relatively self-contained internally contiguous labour markets, are used as one type of functional economic area, though the catchment areas of different sections of the labour market will vary, with professional/managerial groups travelling further than others. Alternative methods for identifying functional economic areas include:59 • housing market definitions – measured by the area in which a household searches for a residential location. Assuming equal attraction of place, this implies house prices within such areas would move roughly in tandem;60 • economic activity based definitions – measured in terms of potential links between businesses and business services. Collecting data on this area is difficult, but there is an increasing recognition of the importance of flows of services and information;61 and • service district definitions – measured as the region from which users draw city- based goods and services.62 Increased mobility complicates such patterns. Economic area definitions 39

Local authorities should be encouraged to work together in drawing up joint development plan documents and determining planning applications where there are significant spillovers which are likely to spread beyond the boundary of one authority. In the medium term, consideration should be given to how the London model, where strategic planning application powers are being granted to the Mayor, could be applied elsewhere. 1 A. W. Evans and O. M. Hartwich, Unaffordable Housing: Fables and Myths (Policy Exchange, 2005), p. 26. 2 Alan Evans points out that this misperception may be caused by most of the population living in towns; when people travel between towns they travel relatively rapidly, but they move more slowly within built-up areas and so perceive urban areas as being bigger. See A. W. Evans, ‘Rabbit Hutches on Postage Stamps: Planning, Development and Political Economy’, Urban Studies, vol. 28 (1991), pp. 853-870, p. 862.

The Government should make better use of fiscal interventions to encourage an efficient use of urban land. In particular, it should reform business rate relief for empty property and consider introducing a charge on vacant and derelict brownfield land. This reform could be considered in the context of the broader set of issues in relation to local government finance being examined by the Lyons Inquiry. In parallel with the introduction of the proposed Planning-gain Supplement, the Government should consult on reforms to Land Remediation Relief to help developers bring forward hard- to-remediate brownfield sites. 62 Valuation Office Agency, Property Market Report 2006. 63 ODPM, ‘A Sustainability Impact Study of Additional Housing Scenarios in England’ (December 2005), pp. 61-62. Protecting the land that matters most 2.32 It is crucial that environmentally sensitive land or land with high scenic value is protected properly, and the various criteria-based environment and landscape designations do this extremely well. They include National Parks, Sites of Special Scientific Interest, Areas of Outstanding Natural Beauty, Special Areas of Conservation and Special Protection Areas. Many of these areas overlap, but they still protect a sizeable area of England from development, as illustrated in the Interim Report.64 Of course, even within these areas there will be planning applications that should be accepted, but these are generally not appropriate areas for substantial levels of new development. Many of these areas are designated on intrinsic scientific or technical grounds rather than attempting to take economic and social concerns into account, in order to maintain high environmental and landscape standards. DEFRA’s work with DCLG to ensure that consideration is given to sustainable use and protection of soil during planning and development is also of value here. The Stern Review has also noted that future species migration patterns must be anticipated: ‘Policies for nature protection should be sufficiently flexible to allow for species’ movement across the landscape, through a variety of measures to reduce the fragmentation of the landscape and make the intervening countryside more permeable to wildlife, for example use of wildlife corridors or “biodiversity islands”.’ 65 2.33 At the same time, land at risk of flooding needs protection. The risk associated with developing on flood plains, where many previously developed sites are located, may in some cases only be alleviated by extremely costly methods, such as construct new flood defences. Approximately 10 per cent of homes, housing 5 million people, are located in areas at substantial risk of flooding.66 The Office of Science and Technology predicts that increased flood risk is among the likely effects of climate change, suggesting that annual average damage claims would increase between two- to twentyfold by the end of the century.67 2.34 There may be market failures in the provision of insurance against flood risk, where developers cannot assess potential flood risk accurately, or where individual insurers cannot cover widespread risk. By forcing developers to account for risk before building, planning can address these problems. A study by the Association of British Insurers suggested that planned development in four Thames Gateway designated growth areas would increase national flood risk by 5 per cent, but would add less than 1 per cent additional housing capacity and that using existing planning guidelines ‘would almost completely eliminate’ the flood risk.68 Land use planning and performance standards, in encouraging private and public investment towards locations that are less vulnerable to climate risks and flooding, are important elements for managing flood risk in the long term.69 64 K. Barker, Review of Land Use Planning: Interim Report provides a map on page 34. 65 N. Stern, Stern Review on the Economics of Climate Change (2006), p. 422. 66 Association of British Insurers, ‘Flooding and insurance’ at www.abi.org.uk/flooding. 67 Office of Science and Technology, ‘Future Foresight: flood and coastal defence’ (2004) at www.foresight.gov.uk/previous_projects/flood_and_coastal_defence/index.html. 68 Association of British Insurers, Submission to the Barker Review of Land Use Planning, www.hm- treasury.gov.uk/media/15E/89/barker2_2006_associationofbritishinsurers_72kb.pdf. 69 N. Stern, Stern Review on the Economics of Climate Change (2006), pp. 419-422. More efficient use of land 58

In the light of growing demand for land and the need to ensure that areas of high public value (such as sites with important or endangered wildlife) or areas at higher risk from flooding due to climate change are adequately protected: • regional planning bodies and local planning authorities should review green belt boundaries as part of their Regional Spatial Strategy/Local Development Framework processes to ensure that they remain relevant and appropriate, given the need to ensure that any planned development takes place in the most sustainable location; • local planning authorities should ensure that the quality of the green belts is enhanced through adopting a more positive approach towards applications that can be shown to enhance the surrounding areas through, for example, the creation of open access woodland or public parks in place of low-grade agricultural land; and • the Government should consider how best to protect and enhance valued green space in towns and cities. In this context, the Government should review the merits of different models of protecting valued open space, including the ‘green wedge’ approach. More efficient use of land 2 67