Government promises "planning liberalisation" policy in Mini-Budget

The Government has announced plans to liberalise the planning system in selected parts of the UK in an effort to accelerate the construction of houses and vital infrastructure projects, among other policies.

In its ‘Growth Plan 2022’, published on Friday (23 September), the Government said it is in talks with 38 local and mayoral combined authority areas in England about establishing ‘Investment Zones’ which will involve relaxed planning rules.

The plan also revealed that new legislation is set to be brought forward in the “coming months” to speed up infrastructure projects, including “reducing the burden of environmental assessments”, “reducing bureaucracy in the consultation process”, “reforming habitats and species regulations”, and increasing flexibility to make changes to a Development Consent Order (DCO) once it has been submitted.

Within the investment zones, there will be designated development sites “to both release more land for housing and commercial development, and to support accelerated development”, the Government said.

“The need for planning applications will be minimised and where planning applications remain necessary, they will be radically streamlined. Development sites may be co-located with, or separate to, tax sites, depending on what makes most sense for the local economy.”

The so-called investment zones will also be subject to a tax programme that will see businesses in designated sites benefit from ‘time-limited tax benefits’.

Businesses in designated areas in investment zones will be subject to 100% business rates relief on newly occupied and expanded premises, according to the Government. In addition, local authorities hosting Investment Zones will receive 100% of the business rates growth above an agreed baseline in designated sites for 25 years.

Alongside this, Mayoral Combined Authorities hosting Investment Zones will receive a single local growth settlement in the next Spending Review period.

In England, the Government will deliver Investment Zones in partnership with Upper Tier Local Authorities and Mayoral Combined Authorities. While in Scotland, Wales and Northern Ireland, Investment Zones will be delivered in partnership with Devolved Administrations and local partners.

The plan also announced that later this autumn, the Government will set out legislation aimed at building more housing.

In part, this will involve the Government promoting the disposal of surplus public sector land by allowing departments greater flexibility to reinvest the proceeds of land sales over multiple years.

“This will encourage the sale of more public land for housing and allow departments and the NHS to reinvest in public services”, the Growth Plan noted. 

Other policies outlined in the Growth Plan include a cap on the unit price that consumers pay for electricity and gas, bringing the average household bill down to £2,500 per year for a period of two years from October 2022.

The Government will also imminently open applications for up to £2.1 billion over the next two years to support local authorities, housing associations, schools and hospitals invest in energy efficiency and renewable heating, the plan said.

Additionally, a temporary six-month scheme in Great Britain, named the Energy Bill Relief Scheme (EBRS), “will protect businesses and other non-domestic energy users, including charities and public sector organisations, from rising energy bills this winter by providing a discount on wholesale gas and electricity prices”.

Responding to the plan, Cllr James Jamieson, Chairman of the Local Government Association (LGA), said the LGA “look forward to working closely with the Government at the earliest opportunity on the design, rollout and implementation of Investment Zones, including on proposals to deregulate and streamline the mechanism for planning permission”.

Cllr Jamieson added: “Councils can be an engine of growth but have been hamstrung by the burden of navigating a complex and fragmented funding landscape, so we are pleased the Chancellor will honour the commitment in the Levelling Up White Paper to streamline growth funding. Local economies are different and will need different things to stimulate them, so councils need maximum flexibility over how growth funding is used and the overall level of existing growth funding needs to be protected."

He later continued: “If we are to ultimately build a world-class economy, we need to improve the way we match local opportunities with the aspirations of local people. Central to this has to be devolving national employment and skills funding to local government, so councils can build on their track record of helping more people into work and plugging growing skills gaps.

“Local government has great ambition to get on with the job of building homes, creating jobs, supporting businesses and investing in new infrastructure. However, massive increases in costs due to spiralling inflation and National Living Wage rises risk undermining those ambitions, by forcing councils to cut local services to meet their legal duty to balance the books. Government will need to step in to ensure councils have the funding to meet these ongoing pressures, in order to protect the services that will be vital to achieve its ambitions to produce a more balanced economy.”

Stuart Tym, planning partner at Shoosmiths, noted that the announcements might suggest the Government is set to abandon the Levelling Up and Regeneration Bill.

In a statement on the Growth Plan, Tym said: “The confirmation that a bill is set to be brought forward to ‘unpick’ the wider planning system may signal the end of the Levelling Up and Regeneration Bill and its planning proposals. The Chesham and Amersham by-election result may have made that approach to de-regulation unpalatable; which remains the political lens through which further reform must be viewed.”

He added: “If the government is to accelerate wider planning reform by ‘unleashing the power of the private sector’, it must also empower the public sector by properly resourcing local planning authorities.”

Commenting on the Investment Zones, Tracy Lovejoy, Planning Partner at Irwin Mitchell, said it was important that the government “keeps the right balance between deregulation, which is necessary for growth and the protections contained within the current planning and environmental frame work”.

“These include how infrastructure systems like highways will cope with the new development and how deregulated development, especially building development, will affect neighbouring properties in terms of noise, overshadowing or privacy. Local democracy is also a significant consideration as people want to have a say in what is built in their neighbourhoods.

“It would be interesting to know how these issues feature in the talks which the government is having with the 40 or so authorities which the Chancellor mentioned. The factors that make deregulation desirable or necessary need to be considered in conjunction with, and not in isolation of these issues.”

Lovejoy added that it is worth emphasising that environmental considerations are no less urgent because of the economic crisis. "Assessment of the environmental impact of these proposals is critical and will be expected to take place as part of the wider impact considerations of any new legislation."

Steve Crocker, President of the Association of Directors of Children's Services (ADCS), welcomed the relief for households and public services through the capping of energy bills, but added that “serious government intervention” was still needed to support stretched local authority children’s services.

Crocker said: “The bleak reality behind the worsening cost of living crisis is families being forced to make tough decisions every day between eating or keeping warm as fuel, energy, food and household bills have risen dramatically.

“We know that more children and families have fallen into poverty since the pandemic began and this worrying trend will continue throughout the winter months. Without serious government intervention we will see more children and families requiring the support of local authority children’s services which are already stretched. Clearly, urgent action must be taken.”

Adam Carey