Select Committee on Transport, Local Government and the Regions Memoranda

Memorandum by Tesco (PGP 51)


  1.  Tesco is the UK's largest retailer and one of the largest users of the planning system. Last year we submitted several hundred planning applications, ranging from superstores to signage, and have dealt with every local planning authority in England. Our professional planners work daily with the planning system and are familiar with its strengths and weaknesses.

  2.  Tesco is also a major contributor to UK regeneration (physical, social and economic), which is a key driver of the UK economy. We create 10,000 jobs every year. 90 per cent of our developments are on brownfield sites. We are, therefore, well qualified to comment on the effectiveness of the planning system.

  3.  Tesco is grateful for the opportunity to respond to the questions raised by the Select Committee. We have separately responded to the Government's Planning Green Paper and daughter documents, and a copy of our response can be found on the Tesco web site


  4.  Tesco supports the plan-led system. Plans can set out a vision for, and describe the intended use of, land in an area.

  5.  However, the current plan-led system has several weaknesses. These contribute to a planning system that is slow, bureaucratic and inflexible. This frustrates and delays development, particularly commercial development.

  6.  Development plan coverage across England is still not complete. Those plans that have been adopted are becoming increasingly out-of-date, with little chance of immediate review.

  7.  The failure of the plan-led system stems from the time taken by local authorities to get to grips with the approach required to draft their development plans. Many plans were too detailed and therefore generated too many objections, resulting in enormous and time-consuming local plan inquiries.

  8.  We believe that most local planning authorities do not devote sufficient resources to the development plan process to enable it to operate efficiently and quickly. There are delays at every stage at the process, for example in the consideration of objections, and in the publication of sensible pre-inquiry modifications to overcome objections.

  9.  Delay is also caused by the multi-layered development plan system. Structure plans are not progressed until regional policy is reviewed and local plans cannot progress until structure plans are approved. Objections by local planning authorities, to each other's plans, also causes delays. This is less common where Unitary Development Plans are prepared.

  10.  The Government's proposals in the Green Paper for Local Development Frameworks (LDFs) should, in principle, address many of the issues around local plans. This is providing LDFs are simple and straightforward, setting national and regional policy in a local context, the other tiers of planning function well and the correct resources are made available. We have some doubts that these provisos will be met (see other comments below).

  11.  We have a number of specific comments on the Government's proposals for Local Development Frameworks:

    (a)  We support the creation of a streamlined planning system based on national, regional and local policy. We believe that, once a regional structure is fully functioning, any attempt to allow counties to keep their planning powers would create unacceptable layers of bureaucracy.

    (b)  We are concerned that the role of community strategies, and their relationship to the LDF, is unclear. We believe that there is a risk of unnecessary and confusing multiple layers of community consultation. We welcome a clear statement by the Government of the intended linkage between the plans and description as to how the system will work in practice.

    (c)  Action Plans are important for significant major developments and are useful tools for enabling a swift regeneration of urban areas. However, we are concerned that the Government's proposals could lead to a proliferation of action plans. They should be specific tools, used sparingly.

    (d)  The most important requirement for a plan-led system is that relevant plans should exist. It is essential that handling targets be applied to LDFs. If this is not done, scarce resources within authorities will be diverted away from policy formulation into achieving the public targets. Guidelines are not enough.

    (e)  We welcome the proposal that LDFs should be regularly updated. It is crucial in a plan-led system that these documents reflect all the latest changes, both in national policy and in local situation. However, if review periods are too short, there is a risk that there will be a constant state of flux. If confusion and inefficiency is to be avoided, a careful balance needs to be struck in setting review cycles for community strategies, action plans and LDFs.

    (f)  The new LDF framework will not be effective if there is inadequate engagement with the community. Tesco is committed to community involvement. Our business depends crucially upon listening to, and delivering the needs of, our customers. Engaging communities, most of whom may be at best ambivalent to the issues of local planning, is by its nature difficult. If we are to have an inclusive process and planning decisions that are right for all, the proposed Statement of Community Involvement must capture the views of everyone in the community, not just special interest groups who may be fundamentally opposed to development.

    (g)  Local Development Frameworks and Action Plans are to be statutory documents and should therefore be fully tested through a local plan inquiry allowing any unintended impacts to be identified. We also support the view that the Inspector's recommendations should be binding on the local planning authority.


  12.  The purpose of regional policy should be to set a strategic development framework for the region. It should be well integrated with other policies, both national and regional and should create a clear strategy within which the LDFs can work. We believe that the regions involve all interested parties in the region: the community, public bodies, business and the voluntary sector.

  13.  Regional structures are currently complex, confusing and inconsistent across regions. We are not convinced at this stage that the arrangements proposed at the regional level can deliver effective strategic planning. We believe the ideal Regional Planning Board should be:

    —  Development-minded;

    —  Focussed on strategic planning;

    —  Accountable;

    —  Representative; and

    —  Producing plans that are well tested and co-ordinated with all other regional plans especially the economic and transport plans.

  14.  The current regional planning groups suffer from the following problems, which we fear will carry over into the new structure:

    —  Local and county authorities and special interest groups dominate the groups. Business and the wider community are not properly represented, despite the Government's best intentions.

    —  There is no right of representation at regional planning EIPs. We believe that Regional policy should be tested openly at a public inquiry, with all parties making representations having the right to attend.

    —  There is not a consistent institutional arrangement at the regional level, which is also accountable, to facilitate strategic planning—strategic planning must not stand-alone.

    —  There are inadequate resources at the regional level to deliver effective RSSs.


  15.  The planning system should have an effective mechanism for assessing and determining applications for major infrastructure development. A significant number of major schemes need to be brought forward to develop and renew the country's infrastructure and these should not be delayed by unnecessarily protracted processes.

  16.  We agree that retail schemes should not come within the definition of major infrastructure. We are, however, concerned about the Secretary of State's ability to call-in proposals as major infrastructure. There is a risk that this discretion may lead to an unhelpful expansion in the classes of schemes caught within the definition.

  17.  We feel that there should be the right to make representations on projects affecting our properties at all stages of the process. We would like a consultation stage before the proposals are considered by Parliament. We believe this would be of great assistance to Parliament.


  28.  Business zones are unlikely to affect Tesco's own developments. On the face of it, it seems a complex structure to create for a few zones.

  29.  Planning delays, which hinder the type of development proposed, could be practically eliminated by a new LDF and Action Plan framework, effective development control and efficient handling targets.

  30.  If the Secretary of State is involved, his department must be proactive in dealing with all commercial applications. A review of PPG 4 Industrial and Commercial development and Small Firms, published in 1992, is overdue and should provide up-to-date policy on leading edge commercial development.


  31.  While the Green Paper sets out a number of options for reforming and improving the planning obligations system, the Government proposes introducing a system of tariffs for local authorities to set for different types of development. We strongly oppose the proposed development tariff. It is a tax. It is anti-development and it will distort and impede development.

  32.  In some areas, any significant increase in the cost of obligations may result in no development. Many of our developments are now in areas of deprivation and provide significant benefits to the communities they serve, including regeneration, access to foodstores and new employment. Often these schemes are marginal in terms of financial returns. The burden for affordable housing will fall unfairly on a few industries dependant on land for their development. There is no justification for requiring retail and housing developers to pay the cost of affordable housing, whilst other sectors such as banks and utilities pay little or nothing. General taxation is a far more equitable tool.

  33.  It will also be an administrative burden. It will be difficult for local authorities to know at what level to set tariffs. Local authorities will struggle to cope with the complex matrix of scales of development, development types, company types, and exclusions which are all required to satisfy the affordable housing need. The result will be market distortions and restricted development.


  34.  We accept that planning obligations should be used in a positive way to help achieve planning objectives, in particular regeneration. Obligations can provide a means of reconciling the aims and interests of developers with the need to meet the costs imposed as a result of development.

  35.  We understand the Government's concern about the lack of transparency and predictability within the current system of planning obligations.

  36.  We believe that the underlying principle behind the current rules, that obligations should be necessary to the development, is the correct one. This gives a clear and readily understood basis for agreement, and will mean a swifter resolution for all concerned.

  37.  We feel that the current system could be enhanced by the following relatively simple measures:

    (i)  Include the scope of planning gain from any particular development within a criteria based policy of the LDF. This would set predictable limits on the scope of obligations, and provide a start point for negotiations.

    (ii)  Require applicants to include heads of terms as part of an application. This would make the obligations transparent, and in the public domain. It would be possible to model standard agreements, to further speed up the process.

    (iii)  Require full disclosure of the issue at the planning committee

    (iv)  Place Section 106 agreements on the planning register together with the decision letter.

  38.  These proposals would achieve complete transparency and could be speedily implemented. They would, in combination with the continued application of the principles of Circular 1/97, achieve the Government's objectives.


  39.  Tesco wish to see a compulsory purchase regime that is clear, consistent and quick. We broadly welcome the reforms set out in the Green Paper. Our view is that the weight of the proposals meets the simplicity and fairness objectives and should lead to a faster conclusion of the process.

  40.  We consider that there should be a clear legislative basis for compulsory purchase

  41.  and welcome the codification, consolidation and simplification of the current complex matrix of legislation and case law. It should make the system faster, more consistent, clearer and increase the potential for successful delivery.

  42.  We also welcome the proposal to extend compulsory purchase for general regeneration purposes, as it should improve the regeneration prospects of urban areas.

  43.  Whilst we welcome the proposals to improve the system with these three objectives in mind, we outline below a few comments and suggestions.

    (a)  We share the Secretary of State's concern about how long he takes to make a decision to confirm an order. He could take a lead on this by agreeing that all orders should be confirmed within a backstop time. We suggest that 16 weeks is acceptable.

    (b)  We welcome the statement that the concept of open market value should be retained for assessing compensation. We also believe that the "no scheme world" principle is the right one for the purposes of valuation.

    (c)  We welcome a payment of additional loss in recognition of the physical and psychological upheaval of compulsory purchase, provided this is a reasonable level. To keep the system simple we suggest a uniform payment is made. We suggest an additional 10 per cent of land cost might be appropriate.

    (d)  We are concerned that the change in disturbance to be paid for "all actual costs and losses", could give rise to unfair and unreasonable claims. This will create scope for dispute, complicating and slowing down the process. We wish the Law Commission to include a requirement obliging claimants to mitigate against their loss.


  44.  We share the Government's aim of an effective reform of the planning system, and welcome the start of this process. We are entirely at one with the Secretary of State for Transport, Local Government and the Regions when he says in his forward "we need a better, simpler, faster and more accessible system that serves business and the community"

  45.  However, we are concerned that in practice the Government's objectives will not be achieved, especially for businesses who face the consequences of the failings of the existing system.

Planning Policy Guidance

  46.  One of the key foundations of the planning system is national planning policy

guidance (PPG). We welcome the proposed review of PPGs, especially PPG6 Town Centres and Retail Developments. PPGs should continue to set out the Government's positive attitude and policies towards industrial and commercial development. We are concerned that ad hoc clarification has led to unnecessary delays and inconsistent planning. Full and open consultation must take place when a PPG undergoes review.

Regional Planning

  47.  While supporting the principle of regional planning policy we consider that regional structures are currently complex, confusing and inconsistent. Regional plan making is remote and fails to engage with businesses and communities. The proposals in the Green Paper do little to address these criticisms. We are also concerned that redirecting planning functions from structure plans to regional plans could, in the interim, cause transitional delays which would delay the preparation of Local Development Frameworks. More thought needs to be given as to the best solution.

Local Development Frameworks

  48.  A simple and consistent national and regional framework of policies would set the context for strong and consistent local plan making. To make the system work plans should be regularly updated and the process must include engaging the local community. We consider that an LDF can be created in 18 months. At present, individuals and businesses, have to wait for plans to pass slowly through a complex and lengthy process. Timely review will enable all parties to play a more active and productive part.

  49.  To ensure that Councils give LDFs due attention and resource them properly, There should be strictly imposed handling targets. If this happens local communities and businesses will benefit. Action Plans, provided there are not too many, will also have a beneficial effect if they are subject to similar review and consultation.

Development Control

  50.  There is very little in the Green Paper on development control that will achieve real step change. Tesco's experience is that all of its applications are dealt with by local planning authorities much more slowly than the current and proposed targets. Handling targets for all planning applications to be determined at each stage in the process need to be applied. Local Planning Authorities, Government Offices, the Planning Inspectorate and the Secretary of State should all be held accountable for working within defined targets. It is Tesco's view that all applications (including those determined by the Secretary of State) should be determined within 12 months. This would compare with a typical current period of 82 weeks for a Tesco superstore application. See Annex1.

  51.  Strong Local Development Frameworks, based on clear national guidance, should lead to high quality development control, reducing the need for the Secretary of State to call-in applications. This would be a significant improvement from the present tendency of the Secretary of State, to call-in proposals that are often only of local significance. For example, cases have been called in on detailed points of design, the nature of linkage to a town centre and the form of accessibility for public transport.


  52.  Resources are fundamental to the operation of the planning system. It is our experience that planning departments are under resourced and this will continue to undermine the proposed reforms of the system unless it is addressed. Tesco is prepared to pay larger fees for major developments provided this would demonstrably improve resourcing and capability.

Planning Obligations

  53.  Our view on tariffs is set out above. Our proposals would enable certainty, public participation and faster decisions. Tariffs will not. The planning system was not designed to collect taxes to fund affordable housing. Giving planning that role will be damaging and risks a major decline in development as seen with the Development Land Tax

  54.  Tesco considers that, without significant amendment and clarification, especially on handling targets, the Government's reforms will not produce the expected benefits for business or for others.


  55.  If provided with sufficient resources and a positive steer from national planning policy guidance, planning can promote urban renaissance.

  56.  Tesco is actively playing a part in urban renaissance. 90 per cent of Tesco stores are now built on brownfield sites. Often decontamination has to be undertaken and new infrastructure provided, including ways of providing access for pedestrians and customers arriving on public transport. The regeneration is not only physical. We have, to date, entered into twelve partnerships with council training bodies and the voluntary sector to deal with the issues around social exclusion. Hundreds of long term unemployed people have jobs as a result. Tesco is a developer that has a long-term relationship with the communities it locates within.

  57.  Tesco believes it could do more but has been thwarted by the weaknesses in the current planning system. There are examples where carefully prepared schemes which are consistent with local and national policy and are well supported by local planning authorities and local communities, are nonetheless called-in. The result is costly inquiries diverting resources away from urban renaissance. This has dampened confidence in the planning system for all parties including local communities. Proposed stores at Batley, Brighouse, Clapham, and Warrington have all been delayed to the detriment of local communities.

  58.  We are positive about reforming the planning system and believe that, if it succeeds, urban renaissance can accelerate.

  59.  We believe in evolution not revolution, we strongly advise a pragmatic approach to reform and emphasise the need to avoid unintended consequences arising from changes. Too much change brings about uncertainty for developers who may postpone or even cancel development as a result. This would thwart urban renaissance.

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