UNCORRECTED TRANSCRIPT OF ORAL EVIDENCE To be published as HC 517-iHouse of COMMONSMINUTES OF EVIDENCETAKEN BEFORECOMMUNITIES AND LOCAL GOVERNMENT COMMITTEE
planning policy statement 6: town centres
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This is an uncorrected transcript of evidence taken in public and reported to the House. The transcript has been placed on the internet on the authority of the Committee, and copies have been made available by the Vote Office for the use of Members and others.
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Transcribed by the Official Shorthand Writers to the Houses of Parliament: W B Gurney & Sons LLP, Hope House, Telephone Number: 020 7233 1935
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Oral Evidence
Taken before the Communities and Local Government Committee
on
Members present
Dr Phyllis Starkey, in the Chair
Mr Clive Betts
Andrew George
Anne Main
David Wright
________________
Witness: Ms Kate Barker, Author of the Barker Review of Land-Use Planning, gave evidence.
Q1 Chair: Can we start this session at the beginning of our inquiry on PPS6 in relation to town centres with our first witness, which is Ms Barker. Can I ask you to start with, Ms Barker, whether you could just say what you believe the key objectives should be for government planning policy in relation to town centres?
Ms Barker: I do not think I could put it any better than it was put in the consultation on the new PPS that came out last week, to be perfectly frank. I thought it was very clear in that what the planning policy towards town centres is; it is about trying to make sure that town centres are vibrant and all those things, and that they are protected from being undermined by too much competition on the outside. I am very supportive of all of that policy.
Q2 Chair: Can I ask you if you would not mind leaning forward very slightly because I am certainly having slight difficulty hearing you.
Ms Barker: I have to say that these are the most uncomfortable chairs I ever sit in. They are not designed for somebody of my height so I am sorry. Would you like me to give my answer again? I thought you looked rather baffled. I was simply going to say that I thought the Government's policy towards town centres, which was set out most recently in the consultation on the new PPS that came out at the end of last week, seems to me very clear and cogent and it is one that I would support. I am not sure I have anything really substantial to add to it.
Q3 Chair: I think you might turn out to be a nightmare witness if you do not have anything to add to it, but can I just probe you slightly. Can I turn it round a different way: to what extent do you think policy thus far has actually been successful in relation to town centres? Are there ways in which it needed to be changed?
Ms Barker: Perhaps we ought to get on and talk about my specific proposals in a sense because when I came to look at the then existing PPS6 - it seem quite a long time ago since we have had now two layers of consultation subsequently - my concern was not the importance of the town centre and the weight on town centre, it was just that in some sense it had gone a little bit too far. I have to say that my work on planning has led me to think that planning is a really, really difficult business. It involves a lot of exceptionally difficult decisions where you are having to balance one set of interests against another and very often of course both the costs and benefits of planning are pretty concealed, they do not really take place in a very transparent way, so what I am really getting at here is the benefits of town centre policy, if you are successful, are very clear because you have a town centre that works really well and is very vibrant. If however you have had some costs because there are some people perhaps on the edge of town, or poorer people without access to the town centre who are not very well served, or you are having to pay a little bit more because of the costs of keeping that town centre going, those costs are kind of concealed. In some sense I am concerned about the need to ensure that we have a retail dimension to our towns which is competitive as well as keeping the town centre strong. I was a little bit concerned that policy had just gone slightly too far in the direction that could potentially impede competition. I was of course particularly concerned about this, and of course there has been a lot of work done on this subsequently, with competition in the grocery market where often here this is competition between out-of-town retailers.
Q4 Chair: Can I probe it slightly before I go to Andrew about the needs test bit. When you talk about a lack of competition are you talking exclusively about competition between large supermarkets or are you taking into account the rest of the retail offer?
Ms Barker: I would think also about the rest of the retail offer but quite a lot of my concern was actually about supermarkets and particularly in town centres about groceries.
Chair: Andrew, do you want to press on the needs test?
Q5 Andrew George: In terms of the perceived failure of the needs test, what evidence did you find that the needs test was actually hampering the achievement of those kinds of objectives, the impediment to competition as you describe it?
Ms Barker: I think it is
pretty difficult to say that I found an incredible amount of evidence that is
readily pointable to. I certainly had
one or two companies some of whom went on the record, some of whom talked to me
privately, who said that they were finding it difficult to access markets and
felt that the needs test in particular was an issue for them. Since some of those conversations were
confidential, and in any case it is so long ago now that I can barely remember
them, I will not repeat them. I think
one of the difficulties of course is that planning policy only really has a big
effect over a long period of time and PPS6 has not been in existence for very
long, so it would be quite surprising if there was great and amazing evidence
that there were problems here. We know
of course in general that retail productivity in the
Q6 Andrew George: You referred in your answer to the question of retail productivity and said that in the UK retail productivity is not particularly good. In relation to in-town and out-of-town retail development can you expand on that and explain what you mean by retail productivity and how that maybe differs from the evidence which you gathered at the time that you were looking at it?
Ms Barker: I do not think I have any stark figures to bring you on that and it is very possible that some of the subsequent witnesses may be better able to answer that question, but in some senses it is apparent. Many people will say that in some ways they would prefer to go out of town because it is easier to operate out of town, the costs of doing the development in the first place are a little bit easier, and some retailers, of course, find that the format of smaller stores is difficult for them. Furniture retailers are an obvious example. They might prefer bigger stores which they may find very difficult to get in town centres. Then you have to answer the question as to what you think you want to achieve in your town. Are you happy to think that prices may be a bit higher or would you be prepared to have an out-of-town development for a particular retail purpose?
Q7 Andrew George: So in terms of the terminology is retail productivity simply a proxy for the profitability of the companies that are providing the retail premises?
Ms Barker: I always think of productivity in some sense as sales per head or, more probably in this case, of capital employed. The thought is that it is easier to get good turnover in a larger format for some particular types of store and they are easier to stock and easier to access because you do not have the problems with times of day and access, and all this just makes the operation a little bit cheaper. It does not necessarily mean that the retailers make much more money. I would not wish you to think that it is an ambition of mine to enable retailers to make supernormal profits. It is the consumer really that I have in mind.
Q8 Andrew George: But a preoccupation of yours, if you do not mind me using the expression, in assessing the benefits or the successes or the failures or the inappropriate outcomes of the needs test is retail productivity. Have I missed something?
Ms Barker: Yes, I think that would be fair, although, as I have said, I am very clear that I would not necessarily place every piece of growth in productivity above every other benefit. Contrary to popular opinion, economists do recognise that there may be social and environmental costs of different courses of action.
Q9 Andrew George: Did anything good come out of the needs test? Was it always veering in the direction of an inappropriate outcome or were there some advantages in the needs test? Do you think it actually delivered some benefits to the communities where the needs test was employed appropriately?
Ms Barker: In some sense if I did not think there was some benefit in thinking about the concept of need and what was going on in the town centre, I would not have supported the retention of something like the impact test. I think my real issue was that I felt that if a business was able to pass both a sequential test and the impact test it was very difficult to see why the planners were then coming along and saying, "Yes, we can see that there is nowhere else you can put this and we can see that putting it there will not have an impact on the town centre but actually we just think there is no need for it." That seems, to me at least, a rather strange thing for planners to be doing and saying. However, because I think this is relevant to your question, I made this comment in some interviews and talks I gave after the planning review, I was disconcerted, to be frank, by the response to the proposal to abolish the needs test. I thought the sequential test and the impact test ought to be strong enough and I was surprised at the reaction to the abolition of the needs test, so I suspect that it was being used much more than I thought, and to that extent perhaps not being used necessarily appropriately because it was being used as a substitute for thinking about the things which I think are really important which are the sequential and impact tests.
Q10 Anne Main: You did say that you had had some conversations, some of them off the record and some of them on the record. Could you let me know how much dialogue you had with the market traders' association groups?
Ms Barker: I honestly cannot remember having any dialogue with the market traders' association groups. I looked today at the written responses to my review and I cannot remember seeing them in there, but they may have been.
Q11 Chair: I am not doubting your recollection but it would be really helpful if when you go back afterwards and look down the list of who responded and they did, if you would tell us.
Ms Barker: Yes, I will. They are all on the Treasury website. I am happy to do that but just as a matter of fact.
Q12 Anne Main: It would indicate to me if you do not have a great recollection of it that it may not have truly made a huge impact on your thoughts on this. I find that a little worrying. We have been looking at markets so I am bringing the two things together in my head, and I do wonder then if you have considered what effect you would expect the removal of the needs test to have on town centres and indeed on town centre markets?
Ms Barker: I want to be completely honest about this, and in some sense it was implicit in my previous answer, I did not really think that the removal of the needs test would have an enormously dramatic effect on very many decisions. I hoped that we might as a result of this get better decisions because they were taken on what I would think of as being good, sensible grounds for taking that kind of planning decision. I did not, however, think, and indeed I would have been very unhappy if this had turned out to be the case, that removing the needs test would lead to a free-for-all with lots and lots of out-of-town development. What I thought it might do was lead in a few cases to people who had been asked not to develop out-of-town being allowed to, and I did genuinely hope that it might move towards some of what I was concerned about which was the lack of competition between some of the major supermarkets in out-of-town centres, particularly in grocery.
Q13 Anne Main: But the competition between the supermarkets seems to feature quite high in your considerations. The competition between supermarkets and other people who retail a similar product does not, and that worries me.
Ms Barker: No, I do not think that is fair because if I were not worried about that I would have expressed more doubts about things like the sequential test and the impact test on town centres, which I do think is important, and it would cover markets as well as it covers small shops and independent retailers and indeed incumbents.
Q14 Anne Main: Can I just ask you one more thing then: do you believe that by removing the needs test there will be a greater push from some of the big guys to move into the city centres in a way that they would not do currently, because at the moment they may not have a high street presence and the very fact of the needs test may have stopped them having a high street presence because it was felt that we do not need another supermarket, so would you think that there would be a greater push to invest?
Ms Barker: I did not think the needs test applied to high street development.
Q15 Anne Main: Edge of high street, because people think of out of town as way out, and there is often the grey area, and we have it in St Albans, where there is an edge of town which people worry about.
Ms Barker: Do I think it would lead to a lot more out of town? They would still have to pass the sequential and impact tests so they have still got to say why they could not find a site in the town that would serve them better and they would still have to pass the impact test and say whether or not they thought it would have any impact on the other things that went on in the town centre. I am not really sure in that case that I feel it would necessarily have an ---
Q16 Anne Main: I am just thinking that historic towns often have historic street patterns. If you go to the edge it could be you then shift the whole focus of a town or a city. I just wondered how much thought was put into that.
Ms Barker: In some sense it is the planning system which defines the town centre. There will be cases of course where it is appropriate to expand the town centre because it is no longer large enough. We can all think of towns where that has happened and it has happened successfully and has not undermined things that are going on in the town centre and that is, rightly, a decision that is taken by the local authority. I have to say I would not really have expected the removal of the needs test itself to lead to a lot more unplanned edge-of-town developments.
Q17 Mr Betts: Perhaps you can understand there are some suspicions around about the real reason for removing the needs test, the feeling that there has been a campaign by one or two of the large supermarkets over a number of years because they have seen the needs test as being the thing which has stopped them building their sheds on green fields and they would rather like to go back to that, so getting rid of the needs test is a way forward for them to replicate the bad old habits of the 1980s. Is that a fair comment?
Ms Barker: No, I think I have been pretty clear that I was much more worried about the issue of lack of competition between supermarkets. I would not really have seen the removal of the needs test as making that any more or less difficult. They would still have to answer the other test about impact and the sequential test.
Q18 Mr Betts: When I talk to the planners in Sheffield they say that they felt the needs test was something that was fairly certain because it was a quantitative assessment. It was much harder for supermarkets to get round a clear policy of encouraging city centre and district centre development and they certainly feel much more comfortable with the needs test being there and they are worried that the policy will be less sustainable in the long term because the other tests will not be as easy to defend.
Ms Barker: Having been honest and said that I was disconcerted by the reaction to the needs test, it was clear to me therefore that just removing it would not be quite right, and I was pleased with the way in which the Government has worked to bring the impact test forward. I would have thought, if you look at what is in the new impact test they now propose, in particular the addition of climate change concerns, it seems to me rather unlikely that people would be able to use it in the way in which you suggest.
Q19 Mr Betts: That is what I cannot understand. Why are we being asked to change something if we are going to end up with the same results with a different test?
Ms Barker: I do not think we will end up with exactly the same results. I said earlier that I thought we might get better decisions. I think there are some retailers for whom it is appropriate for them to have out of town. I am not opposed to out of town absolutely in principle, but I share your concern if you are suddenly going to get lots more out of town supermarkets, then I would possibly be unhappy about that.
Q20 Mr Betts: Do you think the change in the economic climate that has happened since you did your initial study has had any impact on this at all? Do you think it has altered the requirements that we ought to have from our planning system?
Ms Barker: I would hope that you would try to have a planning system that existed through time and through trends and, in some ways, the difficulty is that any calculation of needs that might have been done prior to this downturn, along with regional plans, would have been thrown into considerable disarray by the downturn we have got. It is clearly a situation where economic circumstances have changed a lot and in which two things have happened. One is that the vacancy rates in town centres have increased, meaning that it would be much more difficult to pass the sequential test if you wanted to go out of town. The second thing is that town centres themselves have become much more fragile so it will be harder to pass the impact test. I suspect that the present circumstances are ones in which there will be less out-of-town development in any case.
Q21 Mr Betts: One of the things that has been put to me is any change in the planning system creates uncertainty and in the current economic circumstances many new developments have been stalled and will maybe not be started again for a while. I am looking at town centre developments where developers need that certainty, which they probably currently have, they know what the planning system is going to deliver for them, they know that they are not suddenly going to get out-of-town competition built which makes their city centre developments unviable. Do you think this fundamental change can lead to uncertainty which will actually put people off developing in town centres?
Ms Barker: I think I have made it pretty clear that I do not think it is a fundamental change. I did however become concerned, and I think it was a very good point that was put to me by retailers following the review, about the effect of the change. I agree with you, I should say, in general that changing planning policy is a dangerous thing and a good challenge for this change is whether it passed the test of something that is so vital that it needs to be done. My view is that planners thinking about quantitative need when there is no other particular reason to stop the development just strikes me as odd and I think it is something I would personally think is not suitable in the planning system. In terms of people who have made commitments to the town centre, I think that is a very useful, perfectly good question to raise. I notice that the redrafted impact test makes it very clear that people should be worried about protecting investment in a town centre but of course we do have to be careful here because you have to ask yourself when does protecting somebody's investment become protecting their ability to make a bit more money because you are questioning competition too much, so again planners are going to have to think about that and I am sure they do and I think the impact test as drafted gives them the right basis to think about that and strike precisely those judgments.
Q22 Mr Betts: So you think it takes account of the very different circumstances in town centres and city centres where developments often take an awful lot longer because you have to assemble sites and put things together?
Ms Barker: Absolutely.
Q23 Mr Betts: So you do need that certainty to enable that much longer period of investment?
Ms Barker: You do and it is undoubtedly more expensive. Once you have decided that is what you are going to do, and it is more expensive, you do then have to think, rightly, in the impact test what is the impact on those people if very soon after they have made the development we allow something else? Of course they cannot expect certainty for all time because you might change the nature of your town centre in ten or 20 years. Certainty forever is not something that any developer would expect but I think they have reasonable expectations and the impact test should enable those reasonable expectations to be met.
Chair: Thank you very much.
Witnesses: Ms Katherine Edwards, Director, Local Communities and Property Communications, Tesco; Ms Sue Willcox, Head of Town Planning, Sainsbury's; Mr Richard Williams, Property Director, Aldi Stores Ltd; and Mr Ruairidh Jackson, Head of Planning and Property Strategy, The Co-operative Group, gave evidence.
Q24 Chair: Could you go along from right to left as I am looking at it and tell us which of the supermarkets you represent.
Mr Williams: Richard Williams, Aldi Stores Ltd.
Mr Jackson: I am Ruairidh Jackson from the Co-operative Group.
Ms Edwards: Katherine Edwards, Tesco.
Ms Willcox: Sue Willcox from Sainsbury's.
Q25 Chair: We have obviously got four of you as witnesses and we have a relatively limited period of time. Can I ask you to exercise restraint and if you agree with what the others have said just say that you agree. We want to concentrate where you disagree, to put it bluntly. Can I start with something that came out of Ms Barker's evidence. She was clearly saying that she thinks that the substitution of the impact assessment with the sequential test against the needs test is not a fundamental change and will not fundamentally affect the future of town centres. Is that a view you agree with or not?
Mr Williams: I agree with that very much so, yes.
Mr Jackson: Yes, it has the potential to work fine.
Ms Edwards: I agree.
Ms Willcox: And I agree.
Q26 Chair: Well, that was interesting! So I guess then the next question is, what do you think should be the crucial objectives to maintain vibrant town centres? Let us start at the other end.
Ms Willcox: The crucial objective, in my view, is we welcome the reinforcement of the town centres first principle of the test, which is an enduring policy, and we think that to focus on a more sophisticated impact test which looks at the needs of a town centre and plans for the future of a town centre and looks at that firstly in the plan-making process and then the development and control process as well will actually deliver the outcomes that the policy is looking for, ie, protecting town centres and ensuring more vibrant town centres.
Q27 Chair: Does anybody disagree? Do I take it that you all want stores in town centres then and not out of town?
Mr Williams: Could I add something here. I think the town centres first policy was excellent at pointing us towards the town centres. The sequential elements of that were very worthwhile but as a relative newcomer to the market we did find that the needs test was preventing us getting into certain markets where it was used in the past in a very right or wrong method, so you either passed or you failed it and in many cases we found it protected the interests of existing uses over and above allowing new entrants into the market so the new impact test from our perspective we feel is a much fairer and more encouraging approach.
Q28 Chair: Right and when you say - and I cannot remember your exact words now - that it kept you out by protecting supermarkets did you mean other food supermarkets?
Mr Williams: Yes it did. There are examples given in the document that we have experienced in the past where the needs test was part of the reason for a refusal, page 67 I think, the site at Greenbanks, Plymouth being an example.
Mr Jackson: It think it is important from my perspective to understand the difference between what we are actually talking about in terms of the needs test because under the impact test, calculation of quantitative capacity, how much money there is in a catchment would still be an essential part of them subsequently working out what the impact was going to be. The concern about the needs test is that it appears to have been used very much as the determining factor when there is actually a selection of tests which should be applied under PPS6, and while in some circumstances that may have led to a restriction of entry, in other circumstances the impact may have been ignored because there was technically the capacity, the need, available, so our concern has always been the disproportionate weight applied to need rather than impact in the sequential approach.
Q29 Mr Betts: The key surely is whether the current policy has switched development from out-of-town sites to district town/city centre sites and it has not, has it, so why the need for change?
Ms Edwards: We cannot think of any experience where we have been turned down on need alone. It has always been linked to one of the other tests anyway, so we think it is quite important that the other tests are given the proper weight that they are given, but I think in terms of protecting town centres and encouraging people to move into town centres, the test largely does it. I think the old PPS as it was written was quite long and complex and bureaucratic and obviously the new one is a lot more streamlined, so I do think it is a bit clearer. You have also got the practice guide which gives you very clear criteria that you have to meet, so I do think it is going to be slightly more transparent and probably easier for people who are not used to the planning system to see exactly what criteria they need to meet in order to get planning permission.
Q30 Mr Betts: I am still not quite sure about that. Because it is slightly less complicated, is that a very strong case to change the whole system and create the uncertainty which can actually mitigate against development?
Ms Edwards: It should give you more certainty of outcome if it operates correctly, so it should give developers more certainty of outcome. Obviously the needs test is still being applied for the development planning stage so that box will also already have been ticked earlier on, so the fact that you have now got very clear criteria that you have to meet, particularly if you are a new entrant to the market who is not used to how the planning system operates, you do know exactly what boxes you need to tick so that might encourage more new entrants than otherwise.
Mr Betts: Is not the suspicion that looking at new entrants and firms that do not have a lot of established presence in areas, really what you want to do is to find a green field and build on it? There is this suspicion of a hidden agenda that there is more profitability, it is easier to stick a shed up and put the car park round it than it is to assemble complicated sites in city district centres and that leads to increased profits, so is that not what the agenda is really?
Q31 David Wright: As a rider to that, Chair, could you tell us how many units as a percentage in terms of new units are actually conversions of buildings from each of you? How many times in terms of putting a facility into a locality have you converted a building rather than built a new store?
Ms Willcox: In terms of converting existing buildings, that is not a big percentage but in terms of going into town centres 60 per cent of our stores are in town centres/edge of centre. We have a big vested interest in making sure town centres are vital and vibrant. That is of our main stores estate, not about the Locals and convenience estate, which is primarily in town centres, district centres and in areas of high footfall. We have a vested interest in making sure that the town centres are vital and viable. In our current opening programme the majority of those are town centre and edge-of-centre locations as well.
Ms Edwards: Ours is broadly the same. We obviously do a whole range of stores from the smaller to the larger and it is not always appropriate to do a larger out-of-town store anyway for what customers in that area want. We are quite happy to look in town centres. On conversions specifically I do not know what the numbers are. I know that over 90 per cent of our new developments are on brown field sites and a large number of those are in town centres.
Mr Jackson: From our perspective we have a different scale issue I suppose to our competitors. We are a convenience retailer predominantly. We have about 4,900 retail stores across the conglomerate of the business and less than 100 of these are out of centre.
Mr Williams: In terms of Aldi, I do not have the precise figures to hand but I can get back to you and give you the precise percentage of conversions.
David Wright: That would be interesting.
Chair: That would be useful.
Q32 Anne Main: Both of you touched on edge of centres. There has not been a good history behind some of the larger guys in this in terms of accumulating land banking within either towns or on the edges of towns which has led to the demise of some of the smaller shops. Why do we have to take your word for it that you are going to work better with this new system?
Ms Edwards: I do not think the new system is going to make huge changes to how we work because I think if you are already flexible and you go into town centres you still will. It should be noted that the Competition Commission did not find evidence of land banking at all amongst the big four because they found that although you may hold the sites for a long time they were actually sites that supermarkets were trying to progress.
Q33 Anne Main: But when you hold them like for example in my constituency for eight or nine years, it means the other shops around them tend to go into decline because you have got this huge site that you are putting together, and I know it is complicated, but it can be seen that the larger guys do not really care about the local community when those sort of things happen which is why, given that we are now supposed to expect that the impact assessment is going to mean that there is going to be thought for how the local communities' shops and facilities will survive under this new test, I think we alter it at our peril from the needs test into something different. I think that we do have to be sure that you can argue why this would make a big difference. If you are arguing that it is not going to make a big difference, I cannot see why we are doing it.
Ms Edwards: I do not think it is going to make a huge difference but it is a more holistic test so it does look at a lot more criteria across the town centre. The needs test in some senses could be seen as quite a blunt instrument because it looked at just one aspect but in terms of what this test looks at in terms of the balance across the town centre I think it is more comprehensive.
Mr Jackson: I think the new impact test does have the potential to change quite significantly the way that assessments are undertaken. It is meant to look at environmental, social and economic impacts, so it is a more rounded assessment. It is similar to the type of way that a strategic environmental assessment would look at the elements together. Provided the data that is used is used in a way which is independent and objective it does have the potential. I think one of the problems we have just now is often applicants are expected to analyse the data to test the proposal that they are submitting which tends to come out in a particular answer in that circumstances. Looking at it in a more rounded way, the impact could become a very good way of understanding really the tensions that happen between smaller retailers, larger retailers and the wider social and environmental effects as well as the economics.
Q34 Anne Main: So who is going to do that analysis?
Mr Jackson: The daughter documents to the draft do give some idea as to how methodologies should be used, but planning authorities do have a responsibility to undertake objective analysis as part of the plan-led system to thoroughly assess alternatives and to justify the policy positions that they have. Part of the tension that you have just now is that PPS6 is being used more as a development control document, a response and a reaction to retailers taking the initiative and submitting proposals, rather than planning authorities taking the initiative and trying to address the needs of their communities and create opportunities on sites that would be suitable for wider planning benefit.
Q35 Andrew George: No doubt all four of you will tell us that the companies you are here to represent care very passionately about the environment and society and the communities in which your stores are based and of course the vibrancy of the local economies. In terms of just being clear about how things are going, I am not asking you to give in the public domain commercially confidential information, I just wonder to what extent you could say a little more about the balance of where your stores are in terms of in-town/town centre. You have given numbers but in terms of the proportion of your overall turnover, how significant are your town centre presences within the company? How much in terms of turnover are the out of town - and indeed in the part of the world that I come from which is west Cornwall you are either in town or you are out of town and some might call that the edge-of-town development - so the edge-of-town/out-of-town development versus the in-town development? I wanted to see what proportion is genuinely town centre in terms of your overall turnover.
Ms Willcox: In terms of
turnover obviously that is commercially sensitive information and so I would
not be able to give that, but I would say that all of our stores are important
to the business. They all contribute and
they are all economic otherwise we would not keep them open and run them and
invest in them, which we do in terms of refurbishment programmes as well as
extensions, et cetera. As I said, 60 per
cent of our portfolio is in town centre or edge-of-centre locations. I class edge of centre as per the planning
guidance which is within 300 metres with an easy walk, as it were, between the
centre and the store. I think that edge-of-centre
locations can be really beneficial to town centres because they can help
provide car parking for town centres and footfall and generally to claw back
trade that might otherwise be going to an out-of-centre location, so I think
personally that edge-of-centre locations are very good and very
beneficial. As I say, we invest heavily
in town centres. Our most recent opening
was in a small town centre at
Q36 Chair: Can I ask Ms Willcox, you said that edge of centre can revitalise town centre. I do not necessarily want you to give an example now but it would be very useful to have a specific example of that.
Ms Edwards: Edge of centre?
Q37 Chair: Not out of centre, edge of centre which revitalised the town centre.
Ms Willcox: There are a number.
Ms Edwards: There is an example in the draft PPS6, the Beverley example is an edge of centre where it revitalised the town centre where an independent study was done commissioned by the council and not by us.
Q38 Anne Main: On edge of centre I wanted to ask, if there is an example where it is positive, do you accept that it could be negative potentially if, for example, it leads the people away from the town centre? It is up to a local authority to decide whether it would be positive or negative is what I am saying; it is not necessarily clear-cut.
Ms Willcox: It is how well integrated it is.
Ms Edwards: It would depend on the accessibility and links and all those kind of issues.
Q39 Chair: I think you were still answering Andrew's question, if you have anything to add.
Ms Edwards: In terms of turnover, as Sue said, I cannot really give you the percentage of the turnover. All I do know is that of our portfolio of stores over half of them are the Metro and Express format and they do tend to be town centre stores.
Q40 Chair: What about the big stores though, how many of them are city centre?
Ms Edwards: I do not know the exact proportion. It is a pretty large proportion and I am quite happy to follow up and tell you exactly what it is.
Q41 Chair: That would be helpful. Mr Jackson?
Mr Jackson: We are a slightly different type of business so we run a small proportion of the overall number but a large number of stores that are very marginal because of the desire of our members to retain a presence in often excluded communities that do not have options for alternatives, so the situation is different for us. Broadly speaking, in our profitable stores the vast majority of these are either in town or neighbourhood centres. If I could respond very briefly to your question about edge of centre, if the planning authority is taking control of the issue and looking at a plan-led system effectively, then if they identify there is a need and a rationale for extending the town centre in a certain direction then they should be using the full range of policy initiatives at their disposal as an authority to provide improvements across that centre to make sure that the potential benefits cascade effectively. They have a lot of levers that they can pull and that are available to them. In my experience, what tends to be the difference between success at edge and non-success is the challenge of actually supporting and delivering wider benefits.
Mr Williams: Again, we are slightly different still further. We are a single format operator and therefore we are as likely to be successful in a town centre environment as we are in an out-of-centre environment. The important thing for us is the proximity to our catchment. We are a neighbourhood-type store operator operating up to 16,000 square feet which is slightly different.
Q42 Andrew George: In view of the time could I concertina three questions into one. One may be again asking for commercially sensitive information. The first is how do you see the future retail trend? Do you think there is a trend? You are very committed to town centre retailing. Do you see that as a trend and as something which is going to flourish more in the future and is going to grow or do you see that the trend to out of town is going to continue? The second is the commercially sensitive one: would you as a company see yourselves moving more and more into the town centres or are most of your future projects in terms of developments going out of town? And the third question is: do you think that this new impact assessment will make life for you with regard to your out-of-town plans easier or more difficult?
Ms Willcox: I will start with the last question first. I think that it will mean that for us as applicants and for planning authorities in plan-making and control decisions everybody will have to look a lot more closely at the town centre, at the health of the town centre, and take a more holistic view of what is right or wrong for the town centre, so in some cases, yes, it will be harder. Certainly the burden of proof is harder. Planning is moving much more to an evidence-based system and probably quite rightly, so that means that everybody will have to present their evidence. In terms of where the future is going, obviously retailers respond to customers and if customers demand a certain type of format then we will respond to it. For example, we have got a very big programme to expand our Locals convenience stores. We have a much bigger programme this year, we are trying to open 55 new Locals this year and 120 in the next financial year. By the same token we also have a demand from customers for bigger stores in certain locations, so I think basically the answer is that we will respond to customer needs, and competition, and try and provide the best thing for our customers.
Q43 Andrew George: You must have a clear view as to whether the trend is going more to in-town shopping or out-of-town shopping because you have got your future development plans no doubt over the next two to three years at least?
Ms Willcox: We have obviously got network plans of where we have assessed where there is likely demand, where there are growth areas, where we might want to put down floor space. In terms of precise locations, again, we will work with local authorities. We have built the sequential test into our site search mechanism in any event so we would go through the sequential test and work with local authorities. We are building a range of stores from 3,000 square feet up to the highest we go which is about 80-85,000 square feet.
Q44 Chair: Can we go along the rest of you ask you to just add in. Ms Willcox seems to be saying that it is consumer demand which is the major factor in driving a lot of you into going for many more small convenience stores rather than big out-of-town supermarkets. Is consumer demand more important a factor than planning policy?
Ms Edwards: You can only work within the planning policy even when you are meeting consumer demand, so I would say the sequential test has been very good at stopping out-of-town development and making it much more difficult to get out-of-town development as it is. There are many areas where you might go and do your public consultation and you are in the town centre and it is more complex because you affect more people. People who come into your exhibitions will often say to you, "Can't you go and put it on that large green field over there where it is not going to affect me and my house or whatever else?" And we say actually we cannot. I think in that sense it has been quite effective. I think Sue is right in saying that because the impact assessment is quite a robust test that does make you have to consider the general health of the town centre. I think in some instances it will make it even tougher.
Q45 Chair: Have you anything to add?
Mr Jackson: Only very briefly. In terms of future trends, I think when the Competition Commission looked at things last time round there was recognition of a kind of separation to large and convenience in term of the retail offer. I think there is some evidence now to suggest that there is a return of the mid-sized, obviously there are entrants like Aldi and others, but more generally perhaps a move into that which offers another more flexible format. The most interesting thing from last summer, and the analysis that we saw about the effect on out-of-town, was the effect of petrol prices. It is the indirect costs on the shopper which are likely to have a significant impact on the locational choices they then take as to where they shop, particularly if the offer is broadly similar in two different locations but the cost of going to these locations is different. Just on the question about consumer demand: do not build stores where people do not want them. That is a basic starting point and then you work out how you can get them to go there.
Mr Williams: I would agree with what has been said. In terms of the new tests I do believe they are rigorous and controlling and I think the important thing is that they are very balanced and people will have to look very carefully at the harm to existing centres, and I think that is the important thing.
Q46 Mr Betts: Can you give any examples of an application which has been turned down under the current arrangements because it failed the need test that might have been successful under the new arrangements?
Mr Williams: If I can answer that, I think the example is page 67, Plymouth Greenbank store. I think it would have been successful.
Mr Betts: Does anybody else have an example? So we are going through all this change for the sake of one store in the country!
Q47 Chair: Can I ask a supplementary? In my own locality it appeared to be that one supermarket put in an application to expand in order to make it difficult for the council to approve an application for a new store from a competitor. It was put to me that that was essentially the first store using up the retail need when commercially it did not actually have a reason to expand except to keep the competitor out. I will not name them. Are you aware of examples of it? Have you done it? Have your competitors done it? Have you been sinned against?
Ms Willcox: It was something that was discussed at the Competition Commission inquiry. That very point was put to witnesses by the Competition Commission and I think it was called "first mover advantage" and whether or not people would exploit first mover advantage by putting in applications to soak up need. That may have been need in the planning sense but it might also be perceived floor space to put off other new entrants. That was the context of it. I think the Competition Commission found very little evidence of it. We have made applications to improve stores, but they would have been plans to improve or extend stores in any event; they would not have been to keep anybody out. So no, we have not done that and I do not think the Competition Commission report found evidence of that. That was the report that came out last week.
Mr Williams: Can I just come back on that one example? Being a retailer who is looking to expand, we have other examples, not always where we are ultimately refused but where the need test is used to certainly slow down, and I can give you examples where it has taken us seven years to get planning consent, five years on the back of need as being the reason for refusal.
Ms Willcox: I would agree with that.
Mr Jackson: Very briefly, on Sue's point, the reality is, if you have an operator who is in a monopoly or duopoly position in a catchment, someone else is coming in, then the operator is probably significantly over-trading, which is leading to congestion and other issues in their store, so expanding the store to improve the customer offer is a legitimate response in that sense. The question on need, from our perspective, as a retailer who is the incumbent retailer in the vast majority of catchments, is that if you pass the need test, the rest of the tests under the present system tend to be dismissed and therefore impacts are looked on as okay because, broadly speaking, there is this need available. We are not looking as a new entrant into most catchments. We are looking as an incumbent who wants to invest in the stores that we have, and the predictability of outcome that is presently there just is not good enough, because there are so many situations where a simple calculation on quantitative capacity can override a wider understanding of the consequences of allowing that floor space into that catchment.
Anne Main: The Chair cited an example of where a store had expanded. I would ask you to consider that need could also mean that a store would in principle be permitted but not of the size that the retailer is trying to put in, and the need was then used to say "You can have a store of X size but not Y size, because the Y size would be perhaps home and wear and electrical goods, which would then suck the life out of the town, but X size would not." Sometimes - and I am not naming and shaming - that can be the impasse, where the retailer is trying to get in a much bigger store than the local area wants.
Q48 Chair: The key question is, would the need test be more likely to stop that or would the impact assessment do the same?
Mr Jackson: The test of scale would deal with that: is the scale appropriate for the catchment area? An alternative response to that is, if you have one large retailer with a very wide offer in a catchment, then it is legitimate for another retailer, a main food retailer, to come in and say, "I want to offer a comparable offer," and that is when you start getting into arguments about scale and proportionality.
Q49 Anne Main: How do you think the impact test will affect that?
Mr Jackson: The impact test should still consider scale because scale is inherent in impact.
Chair: Thank you all very much.
Witnesses: Mr Brian Raggett, British Council of Shopping Centres, Mr James Lowman, Independent Retailers' Confederation, and Mr Stephen Wright, Principal Lawyer (Planning), John Lewis Partnership, gave evidence.
Q50 Chair: I think the three of you were here for the previous witnesses, so bear in mind what they have said. If you are going to be saying something different, we would like to hear it but if you are going to be saying the same, you can be very brief. Can you start by saying who you are representing?
Mr Wright: Stephen Wright from the John Lewis Partnership.
Mr Lowman: James Lowman from the Association of Convenience Stores, which is 33,000 smaller shops.
Mr Raggett: Brian Raggett from the British Council of Shopping Centres, BCSC, basically, the party which is responsible for delivering a lot of the activity in town centres in major retail schemes.
Q51 Chair: Although, for clarity, you also represent some out-of-centre shopping centres.
Mr Raggett: We do represent some out-of-centre retail development companies as well, yes.
Q52 Chair: Can I just start off with the question: how have you managed to come to a view then, as an organisation, given that one could argue that bits of your organisation might be in competition with or have a completely different view to other bits?
Mr Raggett: I imagine that would be a question that could equally be applied to the supermarket operators who have just left the floor but, in relation to BCSC, the principal emphasis is on promoting development in town centres, and very much the larger part of the membership is associated with investors, developers, architects and other consultants involved with town centre development and therefore we are very comfortable with the retail planning policy which has been in place.
Q53 Chair: The first question is really what you think should be the key objectives of government policy in town centre planning and to what extent you think there needs to be change.
Mr Raggett: Could I just kick off on that one, because it relates to the point we were just discussing? I think in PPS6 there was very clearly a statement in 1.3 that promoting the vitality and viability of town centres by planning for their growth and development really was the key point. PPS4 in its new draft form perhaps has slightly lost that, in my personal opinion, in that that objective of promoting the vitality and viability of town centres has now been buried somewhat down the list, in the list of objectives in paragraph 6, and we will look at the comments that we make on that probably some months away from now but we would want to make sure that promoting town centres and their future investment is above all the most important outcome that comes from any change in policy.
Mr Lowman: We would see town centre policy as being about promoting diverse, vibrant town centres. That should be its purpose. There is clearly much to do to make sure that happens, given that through PPS6 we have seen 60% of development still takes place out of town, so it may be a very good out-of-town development but it does not seem to stop it in its tracks. We are seeing three new build supermarkets a month, so put that in context. In terms of the future, I am to be convinced that the impact test on its own will be sharper than the need test. The impact test is a blunt instrument. I am concerned that we are going to see a removal of some of the really strong, hard quantitative measures that were part of the need test, as an example of that. We need to make sure that they exist and are robust in the impact test. I think it is a point that has been made in the Committee a number of times today that the reality of this is that the policy has to be interpreted and applied by local planners, who are not overwhelmed with resource, who are lacking in resource, and have to undertake a lot of very tough interpretations, and therefore I think any change does bring risks with it.
Mr Wright: The Partnership very much supports the Government's town centre first planning approach. As others have said already, the need to plan proactively for vibrant and sustainable town centres is absolutely right, in our view. Mr Raggett raises an interesting point on the perceived weakening of focus on vibrancy and vitality due to it being lost further down the document. With any re-write of policy, especially a re-write as fundamental as this, there will inevitably be an element of operators and their consultants looking to work as much meaning as they can into changes of language. It would be interesting to see and we will certainly be interested to explore that point further as we formulate our formal written response to the draft consultation.
Q54 Mr Betts: You do not think there is a case for change then?
Mr Raggett: Again, if I can kick off on that, there is not a strong case for change but there has been a case made by a number of parties that suggests that the policy could be refined in the way that we have seen. We suggested in our response to the draft of PPS6 about seven ways in which it could be improved or tweaked. I certainly will not go through all of those because you have them already but there is a case for refinement of the policy; there is certainly not a case for a dramatic change. I think one of the most important things is that now it will still be appropriate for local planning authorities to look at the issue of capacity alongside many other aspects when considering the appropriate way to take forward retail policy in their areas. It is not complete withdrawal of the quantitative aspect of impact assessment. It is a re-shifting of focus, in my view.
Mr Lowman: I would agree with that. I will save time.
Mr Wright: As would we. Yes, we agree that a refining rather than a complete redirection is perhaps justified.
Q55 Mr Betts: What do you think is going to be the impact then of this complete redirection? Are we going to see more out-of-town stores? Do you think that is the hidden agenda?
Mr Lowman: The fact of planning policy is it is led interpretation, so to suggest a black and white outcome at this stage would be speculative. I think there is a dangerous scenario one can paint for those who support town centres as a whole, and I think that is that planning officers who are comparatively under-resourced compared to developers find that, as Stephen alluded to, the way that new guidance is interpreted allows for more loopholes for out-of-town developments. With the removal of the need test, the impact test does not deliver what we all hope it will do in terms of those sharper measurements, and you could paint a scenario in which this will lead to more out-of-town development but there are several interpretations and we are talking about shades of grey here rather than black and white.
Mr Raggett: Certainly, if I can just add on that, there is a good deal of scope, in the way the new guidance is drafted, for subjectivity in judgement and therefore, sadly, retail planning consultants do sometimes specialise in trying to pull the wool over the eyes of local planning authorities. I think that is likely to be the case on some of the newer elements that are introduced in the new draft PPS4, and I think that will have to be considered very carefully indeed. That, from BCSC's point of view, is a concern, particularly in relation to some of the smaller, weaker centres, where development has not taken place over the last ten years. A number of centres have seen significant amounts of development but there is now going to be quite a hiatus on development in some of those smaller and medium size centres.
Q56 Chair: You all seem to have quite a low opinion of local authority planners. Do you think it should all be decided by the government?
Mr Lowman: No, quite the opposite. I think it should be decided by local planners. I have a very high opinion of many of the planners I know. My concern is their lack of resources compared to those who are seeking development, and that is the issue. Probably, part of thinking of future planning is about how we can support local authorities with those resources to make the right decision, whatever that may be. Sometimes that decision will be yes and sometimes it will be no.
Mr Raggett: In case you thought when I was saying "pull the wool" meant they did not have the abilities, they certainly have the abilities, and often they need additional resources, as James has said, to make sure that their retail strategies are properly and soundly based, and therefore that may mean that their members need to provide extra financial resources, or DCLG does, in order to assist with some of the more complex arguments that they face.
Mr Wright: I would just like to add to the earlier question about whether we think this will make a difference. I do wonder whether there will be more out-of-town applications. Whether they will be successful or not will depend on how local authorities cope with the test, cope with the information, and how they decide to interpret the policy, but I think there is more flexibility in the policy and I think some who are looking to bring forward out-of-town applications might feel that it is worth taking a crack at it, especially in the current economic climate, where bringing forward town centre schemes is expensive and very complex.
Q57 Andrew George: Is it fair to summarise your positions, separately, of course, as taking a cautious welcome to the proposed introduction of the impact test? Is that a reasonable interpretation of your positions?
Mr Wright: I think, if our response were to be summarised into three words, a cautious welcome would be it.
Mr Lowman: Agreed.
Mr Raggett: Yes, conveniently, that is true.
Q58 Andrew George: Given what you have just said about the resource levels of local authorities, at the local authority level, the potential, as Mr Lowman said, for more loopholes or potentially more loopholes in the system itself - I think, Mr Raggett, you said there was more subjectivity or at least, the system is open to interpretation to a far greater extent. We all know that, of course, the supermarkets have this juggernaut of resources that they can throw at their effort to develop out of town. Do you not think it needs a great deal more strengthening if you are to reassure yourselves that it is going to protect the town centres in the way that I am sure you desire?
Mr Lowman: We want it to be clearer, we want it to be stronger, we want it to be more quantifiable, we want harder metrics to be used. I think some of the problems you described there are problems now and they are more about resource imbalance and market power and those sorts of things rather than just about planning. Where we are, I think the revised policy, just as I painted it as a negative scenario for the earlier question, you could see a much sharper impact test coming out of the policy that could lead to better decisions being made. Hence the cautious welcome.
Q59 David Wright: Can you define what you mean by that? I do not understand what you mean by a much sharper test. What do you mean?
Mr Lowman: I think we mean the impact on town centres being very clearly defined, because that is this idea of very hard metrics. Rather than being an essay writing contest in which a variety of different factors can be thrown into the balance of outcomes of how to make a decision, some very clear hurdles have to be overcome.
Chair: Such as what?
Q60 David Wright: What you mean?
Mr Lowman: Impact on centre. Climate change is in there, which we welcome. Diversity.
Q61 David Wright: How do you measure that?
Mr Lowman: That is the challenge we will put back. I do not have a solution and a formula in my notes but those sorts of things need formulas developing alongside them.
Mr Wright: To pick up on a point that Mr Betts made earlier, it is a move from a quantitative towards a more qualitative approach to assessment, and that means that the safeguarding of town centres becomes much more entrusted to local authorities, exercising their judgement in such a way as to protect town centres, and to positively plan to protect town centres.
Q62 Chair: Can we just try and tease this out a bit? Let us just take the diversity bit. If you wanted a quantitative as opposed to qualitative, would you have to say things like there should be 25 different types of shops? I am not sure how you could do diversity just as a metric. Surely it has to be qualitative. It is not to do with just numbers, is it?
Mr Raggett: Yes, there is no doubt that there will be interpretation in different ways in different places with the policy as now proposed, and that is going to be quite a challenge for planners, who will be perhaps coming to this occasionally, as opposed to retail planning consultants, who may be regularly coming to the same issues on behalf of their clients. There are also some elements of subjectivity, whether they relate to design or sustainability, as was raised a moment ago, where there will probably be the need for some further guidance as to how important those issues are in relative terms compared with the impact on investment that has been regarded as a key priority of the local authority in a particular town centre. I would suggest therefore that, in refining the policy, there might be a need for guidance to be given as to which of the now fairly long list of elements should be regarded as the Premier League or the First Division elements and which ones might be regarded as relevant in certain places in certain circumstances.
Q63 David Wright: I am not trying to be over-critical. I am trying to nail down specifically how planning officers and ultimately local councillors would make assessments on applications. When you are talking about refinement, you are talking about, as you say, re-ordering priorities, making sure that planning officials know exactly what kind of indicators they should be judging, are you?
Mr Raggett: Yes. In my view, that is necessary because there was not always a very clear interpretation of the previous policy in terms of what was the appropriate balance to be struck between quantitative and qualitative elements in judging the assessments that were done in PPS6. It has got to be moved forward if we are to avoid a fog in the future.
Mr Wright: I think the fog in the future is the concern but it is within the gift of local authorities as part of this policy working out to set out in the Local Plan documents to some extent their aims, against which assessments can then be judged. But it does place huge emphasis on local authorities to plan positively.
Q64 Mr Betts: I am still a little confused. There was general concern about the removal of the need test. I am not quite sure whether you want to keep the need test; whether you want it to stay as well as an improved impact test, or are you saying to us that the extra guidance now in the impact test, and possibly further guidance which you would like to see, the impact test without the need test would do the job.
Mr Lowman: I would like to see retention of the need test. I think that is important. We have to understand the grain of government policy on this, and I think it is nevertheless possible to have a robust town centre first policy and also commit to trying to help develop that post the need test but we would rather that were retained.
Mr Wright: To be absolutely frank, I think many of us felt that the ship had sailed on the need test, that the Barker Report recommendations had been largely accepted by Treasury, certainly on this issue, that the DCLG and government looked set to replace the need test with something. Our line has always been that we will support the removal of the need test if what comes in its place is sufficiently robust to give that same level of protection, if not more protection, to town centres.
Mr Raggett: I agree with what Mr Wright has just said.
Q65 Andrew George: Given that, of course, I would not expect you, as retailers, to recommend how you might make the environmental aspect of the policy more robust. Part of what the government is trying to achieve, and certainly in the consultation paper it says, and I quote, it was concerned with "the promotion of town centre vitality and viability, including consumer choice and the range and quality of the retail offer". Would you concede or do you not concede that there has ever been any circumstance in which an out-of-town supermarket has contributed to the range and quality of the retail offer? Do you think that there have been some circumstances where out-of-town developments have in fact contributed to that consumer offer, the range and quality and consumer choice, or would you say that on many occasions in fact it has resulted in undermining the range and quality of the offer within the town centre?
Mr Lowman: The answer is both. It is perfectly conceivable, and there will be examples, where an out-of-town development has improved the offer for consumers in that area. Hence the reason for the policy, which I think there is broad consensus on. There are also lots of examples where out-of-town development has undermined town centres, has undermined the off and the richness of that offer as a whole.
Q66 Andrew George: Could you quantify that a little bit more? Would you say that on balance it has worked against the town centre and that the balance of planning assessment has got it wrong?
Mr Lowman: Yes. I think, on balance, out-of-town developments harm town centres and that is the reason for this policy. I think it is concerning that we still have 60% of development taking place outside of towns, still we have three new-build supermarkets a month, and I think that overall is damaging to consumer choice, and what consumers actually want, which is of course a choice of stores, including large stores, but also small shops within five minutes of where they live, a variety of different offers, and vibrant town centres with a variety of different offers. So on balance, it is something that concerns us deeply, yes.
Mr Wright: The planning system has a huge number of variables to keep it balanced and every week some new ones are thrown at it, whether it is obesity or designing out terrorism or whatever. There is a huge balance of considerations that need to be weighed in the balance. The 2004 Planning Act introduced sustainability, as many other standards, as the key driver at the moment of the planning system. If we are going to look at a sustainable planning system and all that that means, that might mean that other issues have to play second fiddle to that, have to take a back road to that. We think that retail diversity, consumer choice, is hugely important but it is for planning policy to judge which considerations it perceives to be most important and to rank accordingly.
Mr Raggett: All I would add on behalf of the BCSC is that a very wide range of scale and type of in town and, to a certain extent, out-of-centre development has been developed by BCSC members over recent years, but very much the emphasis is now on town centres and almost all of the planned development in relation to the non-food sector, anchored by department stores, is in town centres now. The distinction and the difference relates to supermarkets, which of course do still propose significantly more edge-of-centre and out-of-centre development. One thing I would say is that - it is a small point perhaps - within annex A of the new PPS4 for there is reference to some BCSC research which perhaps would give comfort to the Committee normally, because it suggests that some 486,000 square metres of floor space is in the pipeline going to be built in town centres in each of the next three or four years. That was based on research conducted some 18 months ago and, through my firm, Strutt & Parker, we did a little bit of checking on how much of that was still in the pipeline and how much was now on ice. I think roughly 75% or in some cases rather more of the development that was in the pipeline, that was estimated to be in the pipeline, is now either on ice or not happening. In other words, there is not as much coming through the town centre pipeline as was thought, and therefore now, if I can sum it up, is definitely a good time to be cautious rather than radically shifting policy.
Q67 Chair: I do not quite follow that. There is less development for obvious reasons.
Mr Raggett: For obvious reasons in relation to the economy, but if policymakers were feeling that, actually, it is all going to be, relatively speaking, fine and dandy because a significant amount of development is coming through, therefore we can relax certain policies in relation to edge-of-centre or out-of-centre development, as is, I am sure, very obvious to members of the Committee, the economic circumstances have changed and that is no longer the case.
Chair: I am not sure I follow that.
Q68 Andrew George: I am somewhat concerned about that. This is a policy planning statement that is going to sit for a number of years, and surely we cannot lay down these broad guidelines on the basis of where the economy is currently sitting. Presumably there is going to be an upturn, and maybe another downturn - who knows?
Mr Raggett: Indeed. I think therefore it is entirely right that policy changes, if any, are very minor in nature. One of the difficulties that practitioners have is how little hard information there is on the location of floor space that is built. I think this Committee was promised by Nick Raynsford some considerable time ago that there would be a substantial improvement in the quality and nature of data on retail floor space that was going to be put into the public domain. I am not sure that that is still being worked through as frequently and as regularly as was suggested back in 1999.
Q69 David Wright: Let us get this right. What you are saying is that this planning policy material should have a measure attached in relation to economic performance so that we can knock out three indicators on page whatever if the economy is in downturn but we have to reinsert them if the economy is on the upturn.
Mr Raggett: No, I did not suggest that.
Q70 David Wright: What are you suggesting then?
Mr Raggett: I am suggesting that if there is to be change to policy at a time when the economy is clearly facing challenges, it is important that that change does not encourage, through whatever interpretation of the wording that is put into that policy, a significantly greater proportion of out-of-centre or inappropriate edge-of-centre development. Now is the time to focus more and more on town centre development, however difficult that may be.
Q71 Mr Betts: Are you saying that the uncertainty of change, which there always is when you change any policy, could be more detrimental at a time when confidence is already fragile amongst developers because of the economic climate?
Mr Raggett: Yes. Confidence is fragile and that is the issue you have just summed up.
Mr Wright: I think there is that point and then the point that, because we are moving towards a system, as I understand the proposals, that is more flexible and is more open to interpretation, that could be interpreted locally so as to deliver quick wins, if you like, quick employment wins, quick regenerative aims, possibly at the expense of the longer term planning gain. It is a long-term gain. We last year opened a department store in the new Liverpool One development, which took over a decade from inception to completion because of the land assembly issues, the planning issues, just the scale of the development. There needs to be a consistent certainty in planning policy towards protecting investment in town centres if that sort of scheme is to come forward, especially in difficult economic times.
Q72 David Wright: I understand that now. You are saying we should have a more localised approach, that it should be down to local communities to make those decisions. That is basically what you are saying, is it not? You are saying that local planners should have the capacity to look at the national economic picture and then interpret this guidance. That is what I am trying to understand.
Mr Wright: We agree that local authorities should have the power to set their own priorities and agendas but developers and industry need certainty, and some of that certainty is around consistency of application of policy. If there is more scope for wriggle room on the interpretation of policy, there was less wriggle room... There is still wriggle room under the need test and query - this is one of the exercises that we are going through at the moment as we look at the new proposals - whether there is more wriggle room there for local authorities to take inconsistent views.
Chair: Thank you very much.
Witnesses: Mr Andrew Sangster, Honorary Secretary, Association of North Thames Amenity Societies, Ms Christine Haigh, Campaigns and Policy Officer, Women's Environmental Network, and Ms Gaynor Brown, Tescopoly Alliance, gave evidence.
Q73 Chair: Can you just say who you are and which organisation you are representing.
Ms Brown: Gaynor Brown. I am from Tescopoly.
Ms Haigh: Christine Haigh, Women's Environmental Network.
Mr Sangster: Andrew Sangster, the Association of
Q74 Chair: You have all three been listening to the other witnesses, I think.
Mr Sangster: Yes.
Q75 Chair: Can we focus on the core of this, which is the need test versus the new impact assessment and what concerns, if you have concerns, you have about the proposed switch.
Mr Sangster: We would be in favour of a much more rigorous impact test, and we recognise that in the past the need test has taken priority, and in fact in some cases we have seen that the impact test has almost been dismissed. However, we still think there is a role for the need test. Bear in mind that I represent 21 market towns in Hertfordshire and Buckinghamshire which have their own range of problems, and in many cases there is a scarcity of sites, either in the town centre or edge of centre, and we think that the need test might provide some indication of whether the best use is being made of those sites. By that, I mean in fact if you allow an application, do you finish up with surplus provision when the site could have been put to better use for other purposes? That is one point. We are also concerned about the timing of all of this. The LDF process is going to be very protracted, and yet we may find that this guidance comes in in the meantime and therefore we could find ourselves without some of the tests that would help the process. There is also the question of determining non‑complying planning applications. We believe that the need test may be of some benefit in determining those applications.
Q76 Chair: There are a lot of points there. Let us go along and pick them up afterwards.
Ms Haigh: Our main concern is that the removal of the need test, we feel, is likely to lead to more out-of-centre or out-of-town developments, and our concern is particularly to do with grocery and other convenience goods retailing. This is for two reasons, the first being that we feel that healthy, vibrant and prosperous town and local centres generally facilitate improved access to healthy, affordable food for most disadvantaged groups in society, and women are disproportionately represented within those groups, particularly lone parent households, 90% of which are headed by women, and also single pensioner households, many of which are also women. The second reason is, coming from the environmental perspective, that our understanding is that generally out-of-town developments lead to increased car use. We are seeing a quite considerable increase in greenhouse gas emissions from shopping travel and we feel that is a cause for concern.
Ms Brown: I am here representing the communities that I go out and help support all over the country, and I feel the need test is absolutely essential. We have several applications at the moment where there is more than one facia vying for attention in a town centre so even though you have the town centre first application, it needs a need test. It must be grounded in need, in the catchment's ability to actually spend that money. Ending up with a vast amount of square footage that is not substantiated is a recipe for disaster and it is what we are seeing. All the big boys, particularly the one I have to fight most of the time, are putting in huge applications, and we are getting to the point now where, particularly in the West Country, catchment areas are being used over and over again to justify the same store. Where is the logic in that? It must be relevant to the ability and the need of the local population to actually shop in that store and provide its turnover. It does not work without the need test.
Q77 Chair: Can I just press the last two: what is your evidence that the impact assessment is weaker, given that two of the witnesses we heard earlier, one of whom, the Co-op, which does not have big stores, actually think that the impact test is stronger.
Ms Brown: The Co-op wanted to retain the need test, if you remember.
Chair: No, that is not what they said actually, I think.
Andrew George: That was the Association of Convenience Stores.
Q78 Chair: The Association of Convenience Stores. That is a different matter entirely. No, the Co-op is not in favour of retaining the need test, is my understanding, and they definitely said that the impact test would provide a finer tool for decision-making and would allow other factors to be brought in which could make it easier actually to resist an out-of-centre store. I am just asking you what your evidence is that the impact test would be weaker.
Ms Brown: I see the need test figures being warped to get around it with the greatest of ease so the need test does not prevent entry to anyone to any market. It has not stopped over 200 new stores from Tesco's, for a start, many in very inappropriate places. The need test has not stopped anyone, so why is there the influence to take it away? It has a real purpose in grounding the application so that it is responding to need and to the ability of the population to actually shop in it. We are getting ridiculous situations---
Q79 Chair: No, I understand that. Ms Haigh, do you have any evidence that the impact test would be weaker than the need test?
Ms Haigh: I do not think I can say I have evidence because obviously that policy has not come about yet but I think we heard from some of the previous witnesses that it would increase the number of applications for out-of-town developments and that it would increase the amount of subjectivity in local authorities deciding whether or not those applications were likely to go ahead. It seems very unlikely to me that all of those applications would be refused if it is a more subjective policy.
Q80 Chair: Mr Sangster, your view is slightly different, as I understand it. You want a more rigorous impact assessment.
Mr Sangster: Yes.
Q81 Chair: In what way?
Mr Sangster: I have recent experience of a planning application from one of the major stores which were represented earlier on. With regard to impact - and here we are talking not about convenience goods but about comparison goods - the impact on the town centre was dismissed in a single sentence, to the effect that---
Q82 Chair: This was under the need test. Under the new, proposed impact assessment, in what way do you want that new, proposed impact assessment to be more rigorous?
Mr Sangster: I want it to look at the impact on the independent retailers and small chains in the town. I am talking here specifically about comparison group goods because I think, as an organisation, we understand that convenience goods will be largely supplied by the superstores in future, and continued to be, but we are concerned about the inroads that they are making on the comparison goods market.
Q83 Andrew George: It is quite clear that Christine Haigh and Gaynor Brown are opposed to the removal of the need test and therefore opposed to the introduction of the impact test as its replacement and you would like to see a stronger impact test. You are relatively sanguine about the removal of the need test. You do not necessarily see that as adding a great deal.
Mr Sangster: No, we would like to see it retained but not in prime position.
Q84 Andrew George: Can I also check: are there any circumstances in which any of you would agree that an out-of-town development has contributed to consumer choice, has improved the economic vitality of the town which is primarily their preserve? Are there any circumstances in which you would ever concede that point?
Ms Brown: I have been involved in 75 cases in the last four years and I have not found one that would have been improved by the out-of-town development. Three hundred metres is an awfully long way to carry your shopping.
Ms Haigh: I am not aware of any cases.
Mr Sangster: I do not have exposure to really be able to comment on that.
Q85 Andrew George: No, but you all fear that the proposal within the new consultation document would result in circumstances which would make out-of-town, especially out-of-town retail developments, easier?
Ms Brown: I think it is easy now. My main concern is honesty. When I came into this, I thought it was like insurance, that there was some sort of result, some sort of penalty if you did not tell the truth, and there is not. We need honesty in the submissions. When we gave evidence to the Competition Commission and we asked that the new test involved the relationship with the square footage or square metrage of retail space that already existed, I think we were answered. You cannot win with the supermarkets. You cannot warp to get around that one. That had merit, tremendous merit, and we are very disappointed that it did not go ahead. It really could have counted, I think.
Ms Haigh: I do not think I have anything to add at this point.
Mr Sangster: I would have thought the Local Development Framework should be able to provide some sort of control over out-of-town supermarkets being developed.
Q86 Andrew George: By pre-prescribing the fact that they cannot go ahead you mean?
Mr Sangster: Yes, I would have thought so, but it is early days with the Local Development Framework. We do not know how that is evolving and how effective it will be but, in theory, it should be possible.
Q87 Andrew George: So what one or two measures do you think would be necessary in order to give the impact test the robustness you think is necessary in order to avoid the negative consequences that you have described in terms of this impact on town centres?
Ms Brown: Could you not prescribe a saturation point, a ratio between population and a square metrage of retail space?
Ms Haigh: I think that is particularly feasible when it comes to grocery retailing, because obviously there is a limit to how much a population can eat - or certainly should eat. Perhaps that is more difficult if you are talking about comparison goods such as televisions but certainly I think that is something that perhaps could be looked at. I suppose the other thing I might suggest is perhaps looking at a proportion of small or independent retailers that are required and also to ensure that the quantitative aspect of need is still looked at.
Q88 Andrew George: I am sorry - can you explain the quantitative aspect of need?
Ms Haigh: Within the need test, as I understand it, there is the quantitative aspect, which is looking at the spending power in the local area, and it is likely to change in the foreseeable future, then the qualitative aspect, which is looking at other aspects, such as choice. I think it is the quantitative aspect that is particularly important.
Q89 Mr Betts: The previous witnesses generally began from a position where they thought the need test was the best thing and we ought to keep it, but recognising that there was going to be a change because we had announced that, but were then intent on trying to make sure that the other tests were as strong as possible. Have you given any thought to the nature of an impact test that you would feel a bit more confident in having to rely on?
Ms Brown: Again, I would rather it reflected what was there. The competition test was, in our eyes, completely what we were all asking for, and it was very easily understood by third parties who are not soaked in all this the whole time and have a real job to get entry into it now. That is another point that has not been raised. I got to page 83 before I found the word "community". What happened to the planning policy statement about the community's right to decide the future shape of their environment? Has that gone out of the window? There seems very little in here. We have no access to asking for an appeal. That is only down to the applicant and the local authority, and the Legal Aid regulations prevent us taking judicial review. Communities are having a real job to get in this and they are the people you are supposed to be doing this planning for. Where are they?
Q90 Mr Betts: I just asked whether you could see a stronger impact test working.
Ms Brown: No.
Ms Haigh: If the impact test were to be sufficiently strong, I think it would almost incorporate all the important aspects of the need test, so it would almost be calling the same thing by a different name, as it were.
Mr Sangster: I think for the impact test there are two areas. I was disappointed not to find something in the text on this, and that is the emphasis on linked trips. We talked about 300 metres for edge of centre. It is not only the distance that a supermarket is from the primary shopping frontage in a town but it is also the way that that supermarket is constructed and the way it is operated. Is it easy to park a car there, get your shopping from the supermarket, then put it in the car and walk into town? Or is it made more difficult because it is a multi-storey car park and once you go up to the second or third storey, do you really want to come down and make a trip into the town? So I think linked trips are an important aspect in considering the impact of a development. Another area where I was disappointed not to see something a little stronger is on this whole method of assessing over-trading. Over-trading is used so often for justification and yet at the moment it appears to be based on comparing the turnover of a store with the average for that company's stores. Well, I think that is a nonsense. There should be some sort of benchmarking system in place which would enable planning authorities to judge whether over-trading has taken place.
Q91 Andrew George: Can we get back to the issue of the circumstances in which you have yourselves followed a number of the out-of-town developments, no doubt, and you will have seen some of the impacts on the town centres. Has that been the reason that has got you into the campaigning arena? In terms of the impacts, could you describe the impacts that you find most unacceptable, the things that you believe really damage the town centres. What is it you are trying to avoid happening?
Mr Sangster: I think I mentioned earlier on the whole matter of comparison goods. We accept that convenience goods will be largely supplied by the supermarkets, obviously with some niche retailers, delicatessens and the like, but when it comes to comparison goods, I think that is where some of the town centre, independent retailers are exposed because, obviously, they do not have the buying power that the supermarkets have, they do not have the car parking facilities that the supermarkets have, so we are not talking about a level playing field. It is argued that the supply of comparison goods, both by out-of-town and edge-of-centre supermarkets, should be controlled.
Ms Brown: I am also secretary of our local Chamber of Commerce in Yiewsley in Hillingdon, near the airport. We have had the threat of a Tesco superstore for 14 years in our area and it has had a drastic effect on the town. Before it even came up for planning, we knew the site was there, we knew they had bought it for a pittance, we knew it was going to come forward at some point, so when people are getting to the point where they have to sign another 15- or 20-year lease, it does have an impact. Your turnover is minimal. At the moment turnovers are minor; really, they work on very low margins anyway, and a lot of these independent stores are family businesses where they do not even count in a wage because they are there, and the turnover is it, and it supports the whole family. They are the glue of our community and they are part of our community. We cannot lose that vibrancy and that variety. We really need them. The effect on Yiewsley has been this: there was a point when you would never see more than three stores empty in the town and they never stayed empty for more than three for months. Now, with Tesco's, we went to appeal and we won, and the next time the council caved in to Tesco's, and the number of empty buildings and short-term concessions, instead of taking leases, has increased tremendously. The stores that are being taken up are being taken up by things that are less in competition, like the take-away. We do not need a town full of take-aways and charity shops, and that is what happens to the ghost towns that are left behind when superstores open.
Q92 David Wright: I do not know that example. How far away is the proposed Tesco store from the main centre?
Ms Brown: We have a Tesco Metro right in the middle of town, which is 1,000 square metres, and they are not happy with that. The new one outside of town will be 7,900 square metres, yet the retail assessment done for the LDF says it is not substantiated.
Q93 David Wright: How far away is it?
Ms Brown: It is about 600 metres. It is on the edge, if you like. There is one block between it and the main shopping centre but it certainly will not encourage any linked trips. Nobody will walk that far.
Q94 Chair: Just to be devil's advocate, what evidence do you have that the decline in the centre is anything to do with the Tesco and it would not have just been happening anyway?
Ms Brown: I am secretary of the Chamber of Commerce and when they call me and say they are resigning and they are leaving, I ask why they are leaving and they are all saying "We cannot survive like this."
Q95 Chair: That is fair enough.
Ms Haigh: I will go back to your question, Mr George. I think we have two concerns. One, particularly when we have concerns about food poverty and health inequalities which may well be down to families being unable to access a healthy and affordable diet, one of the key things is local markets, and the effect of a large out-of-town shopping centre with free parking may be that those who would have driven into the town centre and perhaps used the market will shift to using perhaps the out-of-town store because of the free parking and the convenience for them. Those who perhaps do not have access to private transport and depend on the very low prices that markets are able to offer for fresh and healthy food suffer from the decline of those markets because they have lost trade from other groups. That is the main concern. Also, I suppose the other concern about out-of-town development is that, in the case of comparison goods, it may be additional to what is in the town centre so it may not necessarily have a detrimental impact on the town centre, although I think in most cases it would. The concern there is the additional car journeys that are made to an out-of-town location, particularly if people are travelling from the other side of the town.
Chair: Thank you very much.