Communities and Local Government CommitteeWritten evidence from the CBI

It is crucial that the draft National Planning Policy Framework supports a transparent, rigorous planning system that fully supports economic, environmental and social sustainability. The CBI proposes that in its current form, the draft NPPF has the capacity to effectively drive the plan-led system, while always weighing up the respective concerns of all stakeholders, be it local communities, businesses or government, and the principles of sustainable development. This will mean that local communities have a role in deciding what development can go ahead, while ensuring that it can only go ahead if it fulfils environmental and social, as well as economic values. As such, CBI welcomes the opportunity to provide written evidence on the draft NPPF, to the Communities and Local Government Committee Select Committee.

The CBI is the UK’s leading business organisation, speaking for some 240,000 businesses that together employ around a third of the private sector workforce. Our submission reflects full consultation with our membership, including with the following sectors: energy, housing, transport, waste and water infrastructure management, planning lawyers and consultants, property development and retail.

This written evidence makes the following points:

1.Infrastructure investment is a key economic driver but investment is being held back by the planning system.

2.Sub national development is crucial to facilitating infrastructure investment for economic growth, job creation and the decarbonisation agenda.

3.The draft NPPF is sufficiently pro-growth to deliver sub national development...

4....and strikes the right balance between environmental, economic and social development.

1. Infrastructure Investment is a Key Economic Driver but Investment is Being Held Back by the Planning System

Infrastructure investment is a key economic driver, both in itself providing a positive “multiplier effect” on the economy, and by helping to attract and retain private sector investment. The 2011 CBI/KPMG infrastructure survey offers fresh evidence for this. For instance, over 80% of firms report that the quality of energy and transport infrastructure has a significant impact on their future investment decisions.

We also know that infrastructure investment itself provides significant economic returns. For example, spending on construction has a strong positive impact on the economy—every £1 spent on construction increases GDP by £2.84. Similarly, the best transport schemes can offer returns of £5–£10 per pound invested.

However, the survey paints a disturbing picture with regards to the current state of UK infrastructure. As many as 50% of firms believe the UK’s transport networks have deteriorated in the last five years, and 40% of firms believe the energy networks have deteriorated. Worryingly, over half of respondents thought the UK’s infrastructure compared less favourably to EU competitors.

Planning stands out as a key issue - both as a barrier directly to the delivery of infrastructure itself, and as a hindrance to investor confidence as a result. The survey finds 98% of businesses see planning as a barrier to infrastructure delivery.

The Government last year estimated £200 billion would be needed in the next four to five years to upgrade our infrastructure to meet demands; it also noted most of this would need to come from the private sector. So attracting private sector investment in infrastructure is key, and addressing the planning issue must be part of the solution.

2. Sub National Development is Crucial to Facilitating Infrastructure Investment for Economic Growth, Job Creation and the Decarbonisation Agenda

Development at the major infrastructure level is absolutely crucial, and CBI continues to call for a major infrastructure planning system which instils investor confidence. However, a lot of development must take place below the major infrastructure level, and this is also crucial to securing the infrastructure needed for long term economic growth, job creation and delivering a low carbon economy including low-carbon energy infrastructure, waste infrastructure, housing and minerals infrastructure.

The following are four examples which illustrate how sub national planning is critical to facilitating infrastructure development:

On energy infrastructure, in order to meet the 2020 decarbonisation targets and to secure energy supply in the long term, the UK needs to provide a diverse energy mix, for which the government is aiming to see 4,000 wind turbines built before 2020. Wind energy and wind farms are a low carbon source, which garners particular local level opposition. Around half the current capacity for wind energy is subject to the local level planning system, yet the proportion of planning applications for wind farms that are rejected by local authorities is exceptionally high. In 2010, 32 of 66 wind farm applications were rejected. The approval rate of these applications will need to vastly increase if we are to meet our target and secure energy supply.

Waste infrastructure requires considerable development if we are to meet growing demand, and use it to contribute to delivering a low carbon economy. The EU Landfill Directive demands that the UK reduce its landfill to no more than 35% by 2020, and it is now estimated that this will require £8bn investment. The majority of the applications for these new developments will have to pass through the sub national planning system.

Housebuilding is at its lowest level since the 1920s, and the number of houses no longer being planned since the government’s stated intention to abolish regional strategies is in the region of 100,000 to 200,000 houses. While the mortgage market is partially responsible for stimulating the housing market, planning also has a role as an enabler. Local authorities must take a positive approach to applications for housing if we are to reverse this trend and instil investor confidence in the house building sector.

Finally, 350 million tonnes of minerals are extracted each year to provide the essential raw materials on which the construction, electricity generation and many manufacturing industries such as glass depend. An adequate and steady supply of these minerals is crucial for sustainable economic growth. Not only does UK-based minerals extraction mean that we retain related jobs in the UK (the non-energy mineral sector employs over 60,000 people, and the coal industry directly employs over 9,000 people), we also keep down carbon emissions by avoiding the added transport carbon emissions, which would occur if we increased our minerals supplies from overseas. Under the current planning reforms, planning for aggregate minerals extraction will continue to be dealt with by local planning authorities. Thus, making the sub national planning system work for minerals extraction will be crucial to retaining a sustainable minerals extraction industry.

3. The Draft NPPF is Sufficiently Pro-Growth to Deliver Sub National Development...

Once Regional Strategies are wound down with the enactment of the Localism Bill in April 2012, the NPPF policy document will be the only document governing planning decisions, either directly or by informing local plans, below those of nationally significant infrastructure projects (NSIPs). This makes the NPPF a crucial instrument for enabling effective and sustainable sub national planning.

In order to create the sub national planning system needed to help secure effective, sustainable infrastructure at the local and “middle tier” (between local and national) levels of planning, the NPPF must be pro-development while respecting environmental and social sustainability principles.

In February this year, the government launched a pre-consultation to seek early views on the NPPF. The CBI responded by setting out four tests by which to measure whether the NPPF would be sufficiently pro growth to allow crucial development to take place while respecting environmental and social principles of sustainable development. These tests were based around the presumption in favour of development; the duty to cooperate and strategic planning; local priorities and national targets; and the digestibility of the framework. The NPPF as drafted succeeds on meeting these tests, as set out below.

I. Comprising a presumption in favour of sustainable development which will be key to ensuring that the planning system helps rather than hinders the UK’s economic growth

As currently drafted, the presumption has two prongs, both of which CBI sees as being crucial to ensuring the delivery of infrastructure and development, while importantly, retaining the principles of environmental and social sustainability. The first prong entails that a local plan must be pro growth and that it must meet the objectively measured needs of an area. The second prong applies where a local plan is not in place or out of date. CBI believes that the first prong would help ensure that any local plan would make provisions for the infrastructure needs of the area. Effectively, this prong is passing the national responsibility to deliver growth down to local authorities, along with the power to decide how and where development takes place. This is inevitably going to mean that tough decisions have to be made, but trusts those who know most about their local area to make the right decision, rather than being subject to top-down dictat.

As part of this, the draft NPPF sets out that the “strategic priorities” to be provided for in local authority plans include housing, climate change mitigation and economic development. CBI sees as absolutely crucial that this side of the presumption be retained, in order that the development our country needs takes place. For instance, the housing targets contained within Regional Strategies were only valuable inasmuch as they ensured housing was delivered—and we have fallen well short of delivering enough housing. Ensuring that local authorities contain a plan with adequate housing numbers should help avoid a repeat of this failure. The same is true of climate change mitigation—a plan must contain evidence that this is being adequately provided for as a “strategic priority”. The second prong states that, if a plan is not in place or out of date, development should go ahead, “unless the adverse impacts of allowing development would significantly and demonstrably outweigh the benefits, when assessed against the policies in this Framework taken as a whole”. We see this prong’s incentive effect as fundamental to ensuring plan-making takes place - if local authorities wish to control how and where development takes place, they must plan pro-actively. If they don’t have a plan any development will be weighed up against the NPPF. Given that such a small proportion of local authorities currently have an up-to-date plan (approximately 30%), we would have real concerns that without a strong incentive to plan, local authorities would not apply for a plan. CBI supports the plan-led system because it means, when consulting with their local communities, local authorities are offering them a say in the strategic development of their surroundings—be it for housing, waste, or transport infrastructure. A strategic “plan-led” system is better both for local communities who live and use the infrastructure around them—and so should have a say—and for investors in infrastructure who value long term certainty.

II. Reinforcing the Localism Bill’s “duty to cooperate”’, in order to make clear and firm provisions for strategic planning

Cooperation between local authorities is important for strategic planning of energy, waste, minerals and housing. In the absence of Regional Strategies, we have only the “duty to cooperate” as a means of ensuring strategic regional level (or “larger than local” level) planning takes place via cooperation between local authorities. The Planning Inspectorate will be charged with enforcing this duty, and evidence that cooperation has taken place will be a criterion of a sound local plan.

The Localism Bill supports the “duty to cooperate”, both by offering a strong incentive to plan (see above) and also by offering guidance on the issues that the duty is intended to apply to. We have urged government to make this more prescriptive in the Localism Bill, in order to ensure that sub national but supra-local development is planned for. To reinforce this, the NPPF’s guidance is welcomed as a means of supporting the Bill’s duty to cooperate.

III. Communicates the need for local authorities to use local priorities to deliver on national targets

We urge government to continue to make explicit the need for local authorities to align local priorities with national targets, where possible. At present, national targets, such as the emissions reductions and renewable energy targets, are not referred to in the draft NPPF. While the Planning Inspectorate will ensure that local authorities adequately provide for “strategic priorities” so that national targets are met, an explicit reference in the draft NPPF itself would go some way to explaining a community’s responsibility to deliver on these targets. This linkage could also be achieved by including a reference in the NPPF to National Policy Statements (NPSs), which already set out the national need to deliver on these targets.

IV. Is sufficiently simple and succinct to be effective

The draft NPPF is certainly short enough to be digestible, at only 65 pages long. The CBI believes the principles are set out clearly. The CBI recognises that in some instances, some sectoral guidance could be beneficial to clarifying how the NPPF principles be applied. Any such sectoral guidance must kept as concise, digestible and short as possible, and drawn up in collaboration with industry.

4. ... and Strikes the Right Balance between Environmental, Economic and Social Development

The CBI has always maintained that achieving sustainability is a matter of weighing up the three pillars of sustainable development—environmental, economic and social sustainability. The need to deliver economic growth, the urgency to secure low-carbon energy, and pressing social concerns (such as delivering housing and improved transport networks) puts pressure on the planning regime to strike the right balance between the three pillars of sustainable development. This is inevitably going to lead to some tough decisions, but is a realistic reflection of the growing demands from our growing population. An example of the pressure on the UK’s infrastructure is the £10 billion investment in waste infrastructure that is required to enable us to meet our target to reduce landfill waste to 35% by 2020; and a third of UK energy generating capacity needing renewal over the next five years.

The CBI sees the draft NPPF as striking this balance, by giving significant weight to concerns of the natural environment and biodiversity, sustainable communities, the protection of birds and habitats and green belt (see below for more details.)

Giving Significant Weight to Environmental and Social Values

Setting out that planning must allow for natural environmental and biodiversity enhancement to be achieved: the draft NPPF sets out an aim for development to protect valued landscape, provide net gains in biodiversity, and prevent development from producing unacceptable levels of pollution.

Seeking to promote sustainable communities: the overriding principle is to “create strong, vibrant and healthy communities, by creating a good built environment, with accessible local services that reflect community needs and support well-being”. This includes facilitating social interaction, providing local services, and delivering recreational facilities.

Giving strong weighting to the protection of birds and habitats: the Birds and Habitats Directive appraisal must be undertaken at plan and/or project level and the policies in the Framework are set to ensure the EU obligations are not compromised. Indeed, development with a “significant effect on sites protected under the Birds and Habitats Directives would not be sustainable under the terms of the presumption”, so that the presumption straightforwardly could not apply to such development.

Retaining special recognition of the environmental and social value of the Green Belt: the CBI welcomes that the draft NPPF retains the objective of not harming the Green Belt. The CBI welcomes that the draft NPPF proposes strict criteria as to the “exceptional circumstances” which would have to be met if Green Belt were to be developed. The draft NPPF proposes four minor new instances where development applications could be considered only so long as “the principles or protections of the green belt are maintained.” (The minor new instances are for (i) development on previously-developed sites; (ii) extension to park and ride schemes; (iii) development brought forward by local communities and (iv) the alteration of a “dwelling”.)

October 2011

Prepared 20th December 2011