Select Committee on Transport, Local Government and the Regions Memoranda

Memorandum by the CBI (PGP 43)


  1.  The CBI represents companies of all sizes and from all sectors of the economy. With a direct membership accounting for four million employees and a trade association membership accounting for six million employees it speaks for companies that account for 40 per cent of the private sector workforce.

  2.  The CBI believes that reforming the land use planning system is one of the key challenges to be faced in attempting to improve the UK's productivity and competitiveness. Planning is core to achieving a wide range of objectives for business and society, and for achieving sustainable development. But flaws in the planning system affect not just those businesses applying for planning permission, but damage the economy and prosperity as a whole.

  3.  In July 2001 the CBI published its 10 Point Plan for tackling these flaws. If focused on the need to get the system working quickly, efficiently, effectively and fairly. We strongly commend the Government for recognising the need for reform, and for bringing forward a Green Paper, which makes proposals for change. Planning has been a neglected yet crucial issue, and the Green Paper is an important opportunity to help create a planning system that better serves the needs of the economy and society.

  4.  Our overall view of the Government's consultation papers is that there are many very welcome proposals for improving the process, that need to be strengthened by providing enough resources, changing the culture, and providing the right incentives and penalties. However business is very strongly opposed to the proposed tariff—a development tax which would be costly to business and damaging to development and regeneration. We also have some serious reservations about the detail of the proposed Local Development Frameworks, which risk complicating rather than simplifying the system.


  5.  We believe that the Government should give first priority to implementing the Green Paper's welcome proposals for improving development control. Much can be done relatively quickly and without the need for legislation and we suggest the Government should concentrate on these areas first, rather than on securing a Planning Act.

  6.  Many of the detailed proposals reflect ideas put forward by the CBI and others. For example:

    —  Internet planning portal.

    —  Nominated planning portal.

    —  Bringing different local authority consent regimes together.

    —  Separate targets for commercial applications.

    —  Emphasis on the important of pre-application discussions.

    —  Business Planning Zones and relaxations of permitted development.

  7.  To ensure effective implementation of these welcome ideas, further work is needed to improve the penalties and incentives in the system. Current targets are too often missed by councils and sharper teeth would help deliver the full benefit of the new regime.

  8.  The Green paper proposal to ban five-year planning consent is, however, potentially very damaging and should be dropped. Major or complex schemes, particularly in urban areas, can need several years' preparation.


  9.  The CBI believes that the Government is right to want to reduce the number of layers in the planning system. And we support the aim of having local plans that are shorter, more strategic and more up-to-date.

  10.  To achieve this we believe that the detail of how Local Development Frameworks work in practice will need to be developed substantially:

    —  Ensuring they are concise and coherent—a single strategy not multiple plans.

    —  Making sure the preparation and consultation process is streamlined and effective.

    —  Avoiding loading heavy consultation burdens onto applicants.

    —  Getting regional plans working properly before abolishing structure plans.

  In particular we are concerned that the proposed increase in community involvement, combined with the multi-layered nature of the proposed LDF, and the new consultation obligations on applicants, risk making the system more complex, slower and more likely to discourage development.

  It will be important for the Government to avoid letting fundamental reform of the development plan system detracting from the even more urgent need to get the development control system working more effectively.


  11.  Implementation of the Green Paper could be strengthened considerably if it were to be backed up by further measures to tackle the problems of resources and culture of the planning system.

  12.  There are simply to few planners to run the system effectively, and those that remain are too often underpaid, underskilled, poorly managed and demotivated. Business is to contribute through a 14 per cent increase in fees, and some may be prepared to contribute further through delivery contracts that guarantee a higher level of service. But the public sector too must be prepared to play its part in funding what is a vital public service, and this should be reflected in the forthcoming spending review.


  13.  The CBI welcomes the proposals to improve the operation of planning obligations through using standard terms, improved accounting and dispute resolution. Greater clarity in local plans of council policies on planning obligations is also useful.

  14.  However the fundamental link between planning obligations and the impacts of a development must be retained, and we are strongly of the view that no generalised tariff should be introduced. The tariff would be harmful to business and seriously damaging to the objectives of urban renewal.


  15.  The concept behind Business Planning Zones is strongly supported by the CBI. The notion of BPZs is of course experimental, but the principle is sound and it should be trailed as soon as possible.

  16.  Planning has been particularly poor at dealing with fast-moving, globally mobile, highly demanding, high tech companies. There is great potential to make science or business parks more attractive to such companies by ensuring investment there is not held back by planning. Greater freedom for the site owner will enable them to be far more responsive to the needs of their customers.

  17.  Previous attempts to create "Simplified Planning Areas" foundered partly because they were too often designated in regeneration areas which were not attractive to investment even without planning restrictions. For Business Planning Zones to succeed they must be allocated sites that are attractive, prestigious and suitable for development in order to encourage the high-quality investment needed to attract international firms who might otherwise go elsewhere.


  18.  The CBI is still consulting members on this, but we welcome the proposals to streamline and clarify the arrangements for making compulsory purchase orders.

  19.  Our main concern is the reverse notice to treat, enabling property owner subject to a CPO to force that order to be exercised. This could leave scheme promoters (whether in the public or private sector) in a catch-22 position whereby they cannot seek CPO powers until they have finance in place to cover the liability (of being served reverse notices to treat), and yet they may find it very difficult to secure finance without CPO powers in the first place.

  20.  The Government should therefore rethink this part of the proposals, and consider, for example, improving the existing provisions for blight notices instead.


  21.  The Green Paper aims to create "better, simpler, faster, more accessible" planning system. Achieving this is vital to urban renaissance and regeneration and it is strongly supported by the CBI.

  22.  Many of the Green Paper proposals for improving the operation of development control will help contribute towards this, but to be fully effective they will need increased resources in the planning system.

  23.  A smaller number of specific proposals have potential to do significant damage to the aim of urban renaissance.

  24.  One of the most significant of these is the plan to cut planning consents from five years to three years, and the proposed tariff. Shorter planning consents will impact most severely on the complex developments on brownfield (often contaminated) land that are central to many regeneration projects.

  25.  Likewise the tariff is particularly damaging to urban renaissance. While it may simply come off land values in some Greenfield development, it urban developments this is unlikely to be possible and it will add significant new costs.


  26.  The CBI is currently consulting members on this paper. We believe it is right to review the Use Classes Order, and that one of the principles that should be applied to this review is to consider ways in which the planning system could be simplified and the burden on local authorities and business reduced.


  27.  The CBI is currently consulting members on this paper. The Government's commitment to streamline the planning process for major projects is a vitally important step in ensuring that our changing infrastructure needs are delivered.

  28.  The CBI supports the Government's objectives. The principle of greater central decision-making for major national projects should help provide focus and strategic direction. National policy statements, together with improved regional decision-making are important contributions to this. Improved procedures for CPOs and for public inquiries are also useful contributions.

  29.  More detail is needed on the proposed new parliamentary procedure, but it is essential that:

    —  Sufficient parliamentary time will be granted to consider each application.

    —  Decisions in principle can be processed quickly by Parliament.

    —  Decisions taken to approve projects in principle are not just re-opened at public inquiries.

  30.  To complete the reform of major project planning, it is also essential that the Government provides not only strategic leadership through the national policy statements, but also quickly ensures secure funding arrangements for such schemes—whether from public or private sources.

Barney Stringer

Head of Infrastructure Group

Business Environment Directorate

March 2002

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