04 July 2006

Building on planning reform: Barker publishes interim report

Kate Barker, invited by the Chancellor and Deputy Prime Minister to review the land use planning system in England, today published her interim report. She said:

“The planning system contributes hugely to people’s quality of life and sustainable development. A world-class planning system has to deliver the right balance between multiple public policy objectives; it also needs to be flexible and deliver decisions efficiently and effectively. Recent reforms have made big steps forward – but I believe we can still do more to reach these goals.”

Minster for Housing and Planning, Yvette Cooper responded:

“The planning system has got to be able to respond to new challenges such as the pace of global competition and the threat of climate change. Although progress has been made, this report makes clear that further changes are needed to support competition and encourage growth.”

The interim report shows that significant planning reforms in recent years are already making significant improvements:

The Planning and Compulsory Purchase Act 2004 is simplifying plan-making, taking out a tier of the system and aiming to halve the 5-7 years local authorities previously took to update plans;
More than £600m of additional funding has helped local planning authorities speed up their processes in the context of rising case loads, with an increase of more than 60% in applications determined within the 13-week target for major applications and a 50% increase in applications determined within the 8-week target.

However, several factors are likely to put increased pressure on the planning system over the next 10 to 20 years. The most significant are globalisation, more rapid population growth, climate change, and resource depletion. Barker’s review focuses on the potential for further reform to ensure the planning system responds to these challenges in particular, she highlights:

costs of delays - In 2005/06, over a third of appeals dealt with by public inquiry took longer than a year to be decided, while around a third of local authorities are still not meeting Government targets for the proportion of major applications to be determined within 13 weeks. Delays to major infrastructure projects are a particular concern;
a need for greater responsiveness to economic and social change - There are inevitable tensions between a system where decisions on land use are made according to plans of up to 15 to 20 years’ duration, and the reality of increasingly rapid economic and social change. At the same time, the proportion of major applications is rising (from nine per cent to 13 per cent for major-non-residential development in the past five years) while planning is consistently one of the top six concerns of companies looking to invest in the UK. Positive planning can support economic growth and regeneration. However, the review finds that significant investments into the UK, as well as the development of high-tech clusters, have been prevented as a result of planning issues; and
lack of responsiveness to price-signals - The review shows that England has some of the highest commercial occupation costs in the world. London West End occupation costs are 40% higher than any other city in the world, and prime-site occupation costs in Manchester and Leeds are around 40% higher than in mid-town Manhattan, although further research on the operation of the land market is required before reaching final conclusions.

Survey evidence makes clear that businesses believe there is still more to achieve- according to a recent CBI survey, 69 per cent of firms are dissatisfied with the record of local authorities in improving the planning service.

Among the issues that the review will explore in making its final recommendation are:

1. Efficiency of process – how the planning system can be made more efficient, so that it delivers high quality and sustainable outcomes while providing value for money;
2. Efficient use of land – whether current land supply is optimal for development, while protecting environmental interests; and
3. Flexibility and responsiveness – can the planning system be made more responsive to price-signals and changing economic circumstances at a local and regional level and will explore the incentives facing decision makers.

Barker’s final report will be published in late 2006.

The Department for Communities and Local Government also published today proposals to streamline the planning system for minor applications including removing the need for planning permission for small scale microgeneration.

Notes to editors

1. In December 2005, the Chancellor and the Deputy Prime Minister commissioned Kate Barker to conduct an independent review of the land use planning system of England, focusing on the link between planning and economic growth.

2. The terms of reference for the review are:

“to consider how, in the context of globalisation, and building on the reforms already put in place in England, planning policy and procedures can better deliver economic growth and prosperity alongside other sustainable development goals. In particular to assess:

ways of further improving the efficiency and speed of the system;
ways of increasing the flexibility, transparency and predictability that enterprise requires;
the relationship between planning and productivity, and how the outcomes of the planning system can better deliver its sustainable economic objectives; and
the relationship between economic and other sustainable development goals in the delivery of sustainable communities.”

3. This report sets out the interim findings of the review. A final report will be submitted to the Chancellor and Secretary of State for Communities and Local Government later in 2006.

4. Further information about the review, including copies of the responses to the call for evidence conducted from January to March 2006.

5. Kate Barker is an external member of the Monetary Policy Committee of the Bank of England. Previously, she was Chief Economic Adviser at the CBI (1994-2001), and prior to that Chief European Economist at Ford of Europe (1985-1994). She was appointed (by Government) in April 2003 to conduct an independent Review of UK Housing Supply; leading to a final report in March 2004. In October 2005 she was appointed a Board Member of the Housing Corporation.

6. Media enquiries should be addressed to Tom Youldon at the Treasury press office on 020 7270 4420.

7. Non-media enquiries should be addressed to barker.review@hm-treasury.gov.uk or via the Treasury Correspondence and Enquiry Unit on 020 7270 4558.