Select Committee on Transport, Local Government and the Regions Memoranda

Memorandum by London First (PGP 04)


  London First was set up in 1992 to improve and promote London. We represent 300 of London's largest companies as well as the capital's higher and further education institutions. Our response is made in the context of representing businesses operating in London, and in our role of inward investment agency for London, promoting London overseas, assisting companies to set up and ensuring London remains a world city.

  The issue of planning and the planning system is one frequently cited by London First members and inward investors alike as one impeding business competitiveness. The shortage of homes and high cost of office space are the result of low supply, constrained by the planning system, and are often cited as competitiveness issues for London.

  We recently undertook an extensive consultation exercise involving over 80 companies, to advise the Greater London Authority on how they can improve planning in London. Overwhelmingly, business believes that whilst some improvements can be made to the system itself, the major impediment is how it operates. This is largely a problem of a lack of resource in planning, with too few planners and planners not being of sufficient calibre and lacking commercial awareness. We urge the Government to seriously address this in tandem with legislative change, otherwise the impact of the reform will be minimal. Planning must be properly resourced, and the importance of planning fully recognised within national and regional Government.

  The fundamental role of the planning system must be to encourage development and regeneration, balancing the needs of the wider community with the needs of the immediate community. The planning system must balance consultation with speed, and the need to update policies with certainty. Planning, if positive and proactive is the vehicle for the urban renaissance. However, the system as it stands strangles any ambition.

  We welcome the opportunity to contribute to the TLR Select Committee on the Planning Green Paper. In addition to the comments set out below, we urge the Government to consider the importance of certainty in clarity with respect to the timetable for change and transitional arrangements. There is a real prospect of years of uncertainty which will reduce development and regeneration. The proposals are described as the largest reform to planning in 50 years. If this is the case it is imperative to get them right. A great deal of work is necessary to turn these proposals in to a workable planning system.


  1.  Without a significant increase in resources, the planning system will continue to fail all those it is meant to serve.

  2.  The proposals in the Green Paper will increase risk and uncertainty and reduce development and regeneration.

  3.  There will be too many levels of plans with too much consultation resulting in no action.

  4.  The proposals for planning obligations represent a tax on development, moving the onus for infrastructure investment to the development industry, and will stop landowners releasing sites.

  5.  The draconian proposals for development control will only work with a properly resourced and professional planning system.


  The complaint with the current system is that there are too many layers of plans and they take too long to adopt. The proposals under the Green Paper propose to replace one set of plans with another. They introduce a far greater need to consult with the community which will severely slow down adoption, although it is unclear how land and property owners will be involved in preparing RSSs. The requirement to update plans to reflect changing circumstances is welcome, but must be balanced with the need for certainty for the applicant.

  There is no timetable for adoption of plans. Under the existing system 13 per cent of local authorities are yet to produce a UDP. The expectation is that this will only get worse. The requirement for the planning obligation tariff to be determined in the LDF will significantly slow down adoption.

  Community Strategies are currently being prepared which could create tension in preparation of Local Action Plans (LAP) and Local Development Frameworks (LDFs), especially if local pressure groups oppose particular types of development. Community Strategies are not prepared by elected representatives and as such have less democratic weight than other plans, but could severely delay their preparation and adoption.

  Consultation will be through Local Strategic Partnerships (LSP). A local authority area is likely to include a number of LSPs, which begs the question of how they will meaningfully be engaged in the consultation process. This is especially the case for businesses who may be involved in more that LSP. If consultation becomes too onerous and bureaucratic business will not be engaged.

  The definition of community with respect to consultation needs to be carefully considered. On major developments the community is wider than that in the immediate vicinity, and in some cases might be defined nationally. It is quite feasible that a development is in the wider community interest but opposed by those locally, those actively engaged in consultation.

  It is conceivable that an area will be subject to at least four layers of plans: the RSS, sub-regional strategy, LDF and LAP eg the Thames Gateway is explicitly cited. This could be more if there are topic based as well as area based LAPs. The proliferation of plans will cause uncertainty. The areas in which this occurs are likely to be those most needing regeneration/development. The practicality of the plans being developed in the same timeframe, especially as all require extensive consultation, is also debatable.


  The proposals do not clarify or fully recognise the role of the regional body in planning, especially with respect to development control. This is most acute with respect to planning obligations and proposals to pool funds. Pooling arrangements for affordable housing make most sense at a regional ie pan-London level, however, there is no mechanism to enable this.

  Regional Spatial Strategies (RSS) will have statutory status, which we welcome. However, the status of the London Plan is governed by the Greater London Act 1999 and is to remain unchanged. This creates an anomaly, which should be rectified by the SDS having statutory status.

  The definition of national importance with respect to call-ins by the Secretary of State (SOS) should be reviewed in light of regional planning powers. In London, the recent cases of 110 Bishopsgate and the Arsenal Stadium highlight the highly unsatisfactory current position. In both cases the Borough and Mayor were satisfied with the proposals. In the case of Bishopsgate the SOS still called in the application. The SOS decided against calling in the Arsenal Stadium, however, the process added risk and delay. In neither case are there national issues. The call in, or threat of, has delayed major and important development.


  The draconian proposals are more appropriate for a well-funded and properly resourced planning profession. We understand the rationale for stopping the practice of twin tracking and not allowing repeat applications, however, these are market responses to problems in the planning system. They will disappear when the system is operating effectively.

  Proposals to reduce the life of consents to three years and replace outline consents with [non-binding] certificates, do not recognise the complexity of many developments and the time it takes to secure funding, sign pre-lets and place contracts. The intention of the certificate is to enable developers to get an indication of what is developable. However, this will only work if it is agreed quickly and will then be binding when full consent is applied for. Outline consents are essential collateral in securing funding, achieving pre-lets and site assembly eg buying out existing interests.


  The desire to establish an area where development is encouraged and does not require consent is welcome. However, the proposal for it to be for one type of use is contrary to planning guidance requiring mixed developments. It is hard to see how the concept of business planning zones (BPZ) as currently framed will work.

  The definition of "low impact development" is subjective and open to challenge by those seeking to stop development. For example, all developments will impact on the demand for local transport.

  It is unclear if planning obligations will apply in BPZs. If they do, local authorities might charge a higher tariff as a trade off for not requiring planning consent. If they don't, local authorities are unlikely to designate an area and forgo income.


  The proposals for planning obligations assessed by a locally set tariff will in our opinion create too much uncertainty in development and make development too costly. The net result will be a reduction in the supply of houses and offices.

  The proposals break the relationship between the planning gain and the development moving from mitigating the impact of the development, to becoming a development tax. This is a fundamental shift in ideology.

  The proposals will mean that there will be two tiers of payment, the tariff and site specific costs. This will increase development costs and the time taken to secure consent.

  To ensure equity the tariff will have to be set at a very targeted local level. However, this will create long delays in assessing the appropriate level. Variable tariffs may produce the reverse from desired effect ie a high tariff to deter types of development will make the development attractive in that it will raise more revenue.

  The affordable housing element of the tariff will reflect housing need. In London this will either mean that most of the tariff is devoted to affordable housing, or, the tariff will be very high.

  The role of regional government is unclear. If the GLA seeks to benefit from the tariff, will it again hike what has to be paid? The local authority will always want to maximise benefit for the local community.

  It is hard to see how pooling arrangements will work and how they will be initiated. If they are initiated from local authorities' LDFs they will be subject to different and lengthy consultation process, probably in different timescales. It is hard to see how they will get off the ground.

  The most appropriate means of pooling in London will be at a pan-London level by the GLA, especially for affordable housing. However, there is no mechanism to achieve this.

  Pooling arrangements should be time limited (five years) with clear processes to spend the money. It should not be possible to pool affordable housing payments whilst the revenue from council house sales cannot be reinvested. In London it would make sense for affordable housing to be pooled by the GLA.

  The tariff to fund transport infrastructure investment is not collected by those who invest ie Transport for London and operators.

  The thresholds as proposed are far too low and will choke development. The threshold should be set at the definition of "major development" once revised to more accurately reflect what is major development.

  The question of how to assess the tariff is extremely difficult. Assessment by size is too crude, however, by value could be very subjective. The viability of development and the ability to pay a tariff is wholly dependent on the financial viability of individual development proposals. Existing use values vary from site to site, even on adjoining sites depending on types of use, rental income derived, the need to buy out tenants, book value in company accounts etc. Development costs will vary from scheme to scheme eg—remediation costs (the level of decontamination required is dependent on the end use), access requirements, design factors, development risk profile (pre-let as opposed to speculative development another), on-site s106 requirements, etc. If each site will be subject to a valuation to determine the tariff it will be an extremely lengthy and costly process and will be contrary to the desire to speed up planning.

  In preference to a tariff based approach, we suggest retaining the current system with greater guidance and training for local authorities in negotiating agreements, possibly with independent experts to advise.

  The view of London First and our members is that the most immediate priority to improve the planning system is to address the issue of resources. This means ensuring that the importance of planning is recognised by the national and local Government. We welcome the proposal to review the issue of planning fees, however, this is only part of the solution. Any increase in fee income must be ring fenced and additional to existing planning resource, it should not replace existing income streams. Planning training must also be reviewed to reflect the needs of planning in the 21st Century.

Judith Salomon
Executive Director

March 2002

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