The rest is politics…

THERE IS nothing specific about logistics in anything the new Government has so far announced. Calls by the sector from both the UKWA and Logistics UK for a minister for logistics have yet to be answered 10 days in.

Within the Department for Transport there are roads ministers, rail ministers and even local transport ministers, but no one is looking after logistics as yet. Within the newly renamed Ministry of Housing, Communities & Local Government, which will oversee the much-vaunted planning reform – there has been no mention of logistics even in passing.

But it is early days.

One only has to remember that the previous Government’s planning white paper in 2020 made no mention of logistics in all its 84 page length despite the sector making up 8% of the workforce (2.7 million jobs) and providing some £232 billion of GVA a year to the economy.

Admittedly they then went on to publish the Future Freight Plan in 2022 which did address the issues – finally. The number one, of course, being planning.

The Future of Freight Plan’s section on planning explains that there is a disconnect between ‘an industry that is not equipped to properly engage with the planning process, and local planning authorities that are unable to understand the needs of a changing and innovative freight and logistics sector’.

Senior planning director at GLP Europe and former chair of the British Property Federation industrial and logistics committee Gwyn Stubbings noted at the time: “Our planning system remains a barrier and is restricting growth in the sector by not allocating enough land in appropriate locations.

“If the industrial and logistics sector is to play its full part in levelling up, it is vital that we create a more agile planning system which is more responsive to the sector’s needs.”

Right now, according to HBD managing director Ed Hutchinson: “Planning is a huge issue and the delays that it causes are as bad as ever – it is a system that is not fit for purpose and is holding us back economically and fiscally.”

The new government has not been idling and it too has singled out planning reform as its number one cause celebre.

In her first speech as Chancellor of the Exchequer Rachel Reeve said: “Nowhere is decisive reform needed more urgently than in the case of our planning system.” She described it as a ‘graveyard of economic ambition’, adding: “Our antiquated planning system leaves too many important projects tied up in years and years of red tape before shovels ever get into the ground.”

Already the new government is moving to reform the National Planning Policy Framework which will be consulted on before the end of July and while the focus is definitely on the need to build houses – an ambitious 1.5 million have been pledged in this five year term – there is also the understanding that infrastructure projects especially those accelerating clean energy provision are to be prioritised with the ban on on-shore wind in England ended.

Any infrastructure scheme that unlocks further investment opportunities should be highlighted and if necessary pushed up the chain of command for implementation. 

BPF chief executive Melanie Leech

Local Authorities have been told to rethink Green Belt boundaries and reminded to keep up to date Local Plans, while 300 new planners are currently being recruited.

Following the speech Indurent CEO Julian Carey said: “The new government has clearly set out an agenda focused on spurring nationwide growth. The logistics sector has a significant role to play in this, underpinning international supply chains and serving as the back office of the internet.”

BPF chief executive Melanie Leech added: “The Government must also make sure the system supports employment uses as well as homes so that we create sustainable communities.

“The move to streamline infrastructure delivery is welcome and should include the logistics facilities that are vital for the movement of goods and are chronically undersupplied in key parts of the country.”

Indeed, industry body Logistics UK believes the sector could help supercharge the economy by up to £8bn a year. “Logistics underpins all sectors of the economy to deliver for households, businesses and public services, every day,” said Logistics UK chief executive David Wells. However, to achieve this, he said: “It is vital that the new administration involves our industry in all areas of Whitehall decision-making on the economy.”

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The solution to that would be, according to both Logistics UK and UK Warehousing Association CEO Clare Bottle, ‘a dedicated cross-departmental Logistics Minister who will champion the needs of our sector. Key issues include decarbonising the electricity network, reforming the planning system, modernising apprenticeships, and promoting innovation in warehousing. At the moment, issues such as these are spread across eight separate government departments.

While the BPF has not gone quite that far it certainly supports the sentiment. Its number one ask in its manifesto launched at UKREiiF in May this year was that ‘the government works with us and other key stakeholders to create a single integrated strategy for the logistics sector which places investing in logistics property at its heart as part of the UK’s critical infrastructure’. That assumes that government recognises the development of logistics facilities as critical infrastructure.

That aside, the fact that the new government has put planning reform at its core is welcomed. GLP’s Stubbings said: “This is encouraging and hopeful. Going straight for the NPPF review is a valuable opportunity for industry engagement.”

Encouraging Local Authorities to update local plans and reviewing the previously ‘taboo’ green belt is also a boon. Stubbings noted: “There are authorities out there that have not had an updated local plan for decades and we have experienced authorities particularly in the greenbelt that have one employment site that has not been developed despite allocation because it is in the wrong location who then use that to say they don’t need any more.”

Stubbings also highlights the risk taken by developers who often spend years and a lot of money getting a scheme recommended for planning only for planning committee members to go against their planning officer and refuse the application. “That risk should not be there if a scheme has been recommended for approval is has all been scrutinised beforehand we cannot have councillors going against officers and leaving those same officers to deal with the inevitable appeal.”

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Chancerygate’s managing director Richard Bains agreed: “Decision making powers for major projects should not be the preserve of local councillors as they lack the expertise required to make informed opinions on them. 

“On that basis, there should be a presumption to grant planning where planning officers recommend it. In instances where planning is not granted, a swifter appeals process will ensure momentum around applications is not lost.”

Cole Waterhouse outgoing managing director David Nutall said: “The government’s ability to make these ambitions a reality will naturally encourage or quell progress from occupiers and developers, depending on how quickly any proposed changes can be rolled out.”

However, it is not just planning that needs reform Carey noted: “The electrification of vehicle fleets and increasing manufacturing activity with high utility needs are spurring ever-higher energy requirements. This, alongside planning reform, is probably the biggest challenge facing the new government from an industrial and logistics perspective.”

Indeed, speaking to Prologis UK’s regional head Paul Weston at UKREiiF, he identified the power issue as THE single biggest barrier to industrial and logistics development in the UK right now. The issue stems from the fact that DNOs cannot supply power to sites when it is needed.

Colliers national head of industrial and logistics Len Ross explained: “Power is fundamentally paramount for any site or building sold or let – for a basic operation there needs to be at least 500KvA and possibly 2 MvA or in excess of that for chilled, refrigerated or manufacturing uses. There are sites in the system where DNOs cannot provide power for up to five years – who is going to develop a site like that?”

A developer with a site in Enfield requiring 3MvA of power has been told that it can have the power in tranches with 1MvA being delivered in 2028, one in 2029 and the final one in 2030.

The government certainly seems to be behind improving the energy situation in the UK but this and reforming the planning system are going to be big asks. Is the new government up to the job? As Reeves noted in her speech: “We must acknowledge that trade offs always exist: any development may have environmental consequences, place pressure on services, and rouse voices of local opposition.

“But we will not succumb to a status quo which responds to the existence of trade-offs by always saying no and relegates the national interest below other priorities.

“We will make those tough decisions, to realise that mandate.”

The rest is politics…