Long overdue reform
07 November 2023
Over the next twelve months the British Property Federation will be working with its members and regional and national policymakers to bring forward long-overdue reform of the planning system to unlock the delivery of critical logistics space. Sam Bensted explores further.
OUR RESEARCH suggests that the need for modern, well-located warehousing has been underestimated for at least a decade, resulting in undersupply of the space we need for efficient and resilient supply chains.
Analysis from Savills suggests the national availability rate should be close to 8% to ensure businesses can access the space they need to expand and optimise their operations. Currently the vacancy rate is close to 4% - and much lower in London – and has been below the recommended level since 2011. Indeed, Savills makes the case that an acute shortage of space is suppressing activity, with real demand up to 29% higher than take-up (leasing) figures suggest.
National planning reform has always tended to focus on housing with less attention for the employment uses necessary to create genuinely sustainable places for people both to live and work.
However, the publication of a call for evidence on planning for freight and logistics over the summer perhaps suggests a changing of the tide with central government policymakers starting to wake up to the need to plan more effectively for our industrial and logistics uses. Whilst the call for evidence does not include any specific proposals for reform, it does serve as an opportunity for the sector to positively make the case for why planning reform for industrial and logistics is needed over the short term and longer term post the General Election.
The BPF, through our Industrial Committee, has therefore jumped at the opportunity to make the case for a more effective planning environment through our detailed response which is also supplemented by 52 case studies. These bring to life the challenges of bringing forward industrial and logistics projects throughout the country as well the examples of best practice in terms of planning for this form of development on the ground.
Our response notes the most effective reform to improve planning for industrial and logistics would be the return of strategic planning in some form. Under the current system, strategic ‘larger than local’ logistics employment sites are simply not being planned for effectively as they rely on cooperation between authorities with requirements for local authorities to work together through the planning system being less effective since the abolition of Regional Spatial Strategies in 2010. This has been to the detriment of the wider economy and has undermined international investment with strategic employment sites tending to attract nationally and internationally mobile business activity, as well as specific growth centres.
The BPF response also focused on the current shortcomings of the Local Plan process noting the system has failed to keep up with the fast-changing nature of market demand for industrial and logistics, particularly post Covid-19 which resulted in a huge growth of e-commerce. A key issue is the current overreliance on out of date evidence bases through historic employment review which mean that local plans too often do not reflect the economic reality of the present day.
The BPF therefore suggests the Local Plan process going forward needs to become more agile with more flexible planning mechanisms to enable employment sites to come forward outside of the formal Local Plan cycle when it makes sense to do so. For example, many forward-thinking local authorities, experienced in catering for freight and logistics, adopt ‘criteria based’ local policies to enable this with the BPF response noting this approach should be rolled out across the country. An alternative approach to ensure more agility would be for all local plans to include reserve or safeguarded sites to enable additional employment sites, over and above those already allocated, to come forward outside of Local Plan cycles. Such an approach would mitigate for changes in demand not envisaged at the time the council’s evidence base was gathered that becomes quickly outdated.
Key milestones for next 12 months
- Future DLUHC consultation on changes to national planning policy and national development management policies. The evidence gathered through the recent freight and logistics call for evidence is intended to inform proposals to change national planning and associated guidance in this future broader consultation. Consultation expected next year ahead of a General Election.
- Publication of an updated ‘BPF Employment Land Position Paper’ building on the BPF Employment Land Manifesto 2021 which sets out industry recommendations for how land should be allocated for logistics and other industrial uses.
A related issue is that under the existing system there is a lack of consistency across authorities with a variety to different approaches to how evidence for local plans is assembled. In our response, we highlight three very similar authorities ‘on paper’ in terms of their requirement for employment land but all three come to completely different figures through their local plan process. Such examples demonstrate the shortcomings of the existing system and starkly contracts with how the planning system ensures consistency across authorities when planning for housing.
One remedy to this we suggest in our response would be for the government to prepare a National Supply Chain Infrastructure Framework that would sit alongside the National Planning Policy Framework and associated guidance. The framework would compel authorities to plan cross-boundary for industrial and logistics and make sure approaches to evidence gathering are more consistent across local authorities.
Underpinning all of this is a lack of understanding at local and national level about the nature of logistics employment. There remains a misconception that is primarily low-skilled jobs but the rise of automation and AI has meant facilities are more sophisticated and create specialist and technical roles. Indeed, most modern developments will incorporate a significant proportion of office space and will serve as regional or national headquarters, not just distribution hubs. Moreover, they will incorporate green space, biodiversity and sustainability features to help businesses achieve their own ESG objectives and to attract and retain staff. This all strengthens the planning case but as it stands this is not being properly considered.
With a General Election expected next autumn, the current planning landscape remains uncertain. However, it is our strong hope that all political parties can recognise the urgent need to create a more productive planning environment for industrial and logistics if the sector is going thrive and play a leading role in levelling up and driving economic growth. With 70% of the demand for industrial and logistics in the north and the midlands the sector is well placed to rebalance our nation’s economy but will need support through creating a more effective planning framework if the sector is going to reach its full potential.
We look forward to working with our members and businesses across the logistics sector to further these arguments.
Sam Bensted, Head of Planning and Development, British Property Federation