5 Town centres |
82. Planning policy has an important role to play
in making sure town centres meet the needs of local people. The
NPPF sets out measures aimed at "ensuring the vitality of
These include two key tests aimed at protecting town centres from
the threat of out-of-town development: a sequential test, and
an impact assessment test. Under the sequential test, local authorities
should require applications for main town centre uses to be located
first in town centres, then on the edge of centres, and, only
if suitable sites are not available in these locations, out of
the impact assessment test, local authorities should require an
impact assessment if a proposed development is over a locally-set
floor space threshold.
The NPPF is clear that if an application for out-of-town development
fails to satisfy either of these tests, it should be refused.
In this chapter, we will look at how these test are operating,
before looking at wider issues relating to town centre planning
Town centre protection
83. In spite of the inclusion of the sequential and
impact assessment tests, we heard several times that the NPPF
was giving insufficient protection to town centres. A number of
references were made to research carried out by the Association
of Convenience Stores into retail planning decisions under the
NPPF. One of the headline findings of this research was that,
of a sample of 50 major retail planning decisions taken after
March 2012, 76%
of gross retail floor space given permission was located outside
of town centres.
The Town and Country Planning Association told us that the findings
of this research appeared "to show a very significant failure
of the NPPF to direct growth towards town centres".
84. The Government dismissed the ACS's findings as
Mr Lewis told us that the ACS had taken "a particularly small
sample" and that he was not sure that its findings were "entirely
reflective of what is going on right across town centres".
He was, however, unable to offer his own breakdown of figures
as the Government did not collate this information from local
are, therefore, in the curious position of the Government not
accepting the most widely-cited figures on the operation of the
sequential test, but at the same time being unable to point to
any data of its own to suggest that they are incorrect. It is
important that we know whether the sequential test is working
so we can assess whether any changes need to be made. We recommend
that the Government take steps to gather data about the operation
of the sequential test and the extent to which planning policies,
both local and national, are giving sufficient protection to town
centres. We invite the Government to set out the data it has gathered
in its response to our report.
85. A specific concern about the sequential test
as set out in the NPPF was that it had removed the previous policy
on "disaggregation". Planning Policy Statement 4, which
was superseded by the NPPF, stated that local authorities should
ensure that developers had demonstrated flexibility over "the
scope for disaggregating specific parts of a retail or leisure
development, including those which are part of a group of retail
or leisure units, onto separate, sequentially preferable, sites".
There is no such provision in the NPPF. Ian Anderson, representing
the British Council of Shopping Centres, drew our attention to
We heard that, without this provision, developers could argue
that their proposed development was too big for any available
town centre site and thereby get around the sequential test.
Leeds City Council said that, as a result, it had become "become
far too easy to pass the sequential test, particularly for larger
Greg Clark said that the other NPPF provisions on town centres
gave "plenty of grounds for an authority to refuse a planning
application for an out-of-town development if it thinks it would
have an adverse effect on the town centre".
We do not agree: our evidence was clear that the removal of disaggregation
had created a 'loophole' in the sequential test, which was having
a detrimental effect on councils' efforts to protect their town
centres. It appears this is an area where clarity has given way
to brevity. We recommend that the Government restore to the
NPPF the policy on disaggregation, so that local authorities are
required to ask developers for evidence of flexibility as to whether
a proposed retail development can be broken down into specific
parts on separate sites.
NEED AND IMPACT
86. We also received some evidence about perceived
inadequacies of the impact assessment test. Birmingham City Council
told us that under this test alone, retailers could "argue
that their format is unique [and] therefore does not have an impact
on other centres". It called for a reinstatement of a "needs
Planning Policy Statement 6 (PPS 6), the need for a relevant development
on an edge-of-town or out-of town site had to be assessed if the
application was not in accordance with the local plan.
When in 2009 PPS 6 was superseded by PPS 4, the needs test was
not included. We considered whether there was a case for reintroducing
the needs test, but found persuasive the view expressed by the
economist Dame Kate Barker, who told us that when she had looked
at the needs test in her 2006 review of land use planning she
had considered it to be "fundamentally anti-competitive".
We also agree with those who emphasised the importance of assessing
need at the plan-making stage;
it is when making plans, rather than when considering applications,
that need should be assessed. We do not propose the inclusion
in the NPPF of a needs test for development control purposes.
Nevertheless, it is important that local authorities thoroughly
assess and set out the need for retail development as part of
the local planning process.
The future of town centres
87. Beyond the tests designed to bolster 'town centre
first', there were wider concerns about whether the NPPF was taking
the right approach to retail planning. Our evidence showed how
shopping habits were changing. There has been a significant growth
in online retailing, which is expected to continue into the 2020s.
We were also told about a "gravitational pull" of shoppers
towards a smaller number of major retail centres, whilst local
high streets became increasingly dependent on a "convenience-driven
offer", focused on not only retail but a range of local services.
It was not clear to us whether planning policy-either nationally
through the NPPF or locally in local plans-was geared up to address
these changing trends. We were told, for instance, that the NPPF
failed to take account of the growth of multi-channel shopping,
where shoppers used a variety of channels, including online stores
and mobile phone applications, as well as traditional shops, to
research and purchase goods.
88. In Wales, steps are being taken to bring planning
policy in line with new retail habits. In April 2014, the Welsh
Government published research it had commissioned into town centres
and retail dynamics. This research aimed "to consider the
appropriateness of current national planning policy in achieving
the Welsh Government's aspirations for town centres".
Following this, the Minister for Natural Resources in Wales, Carl
Sergeant AM, announced that he had instructed officials to refresh
planning policies on retail and town centres "to ensure they
are up-to-date and take into account the needs and requirements
of 21st century town and retailing centres which are changing
their character as shopping trends evolve".
The Welsh Government's proactive approach is to be commended.
English planning policy should similarly be updated to reflect
changing retail patterns. We recommend that the Government
commission research into changing retail dynamics as they relate
to planning policy. It should aim to commission this research
by the end of the parliament, and to publish it by the end of
2015. We further recommend that the next Government, by the end
of 2015, launch a consultation on how the NPPF should be amended
to bring it up to date with modern retail habits.
89. Local authorities too need to face up to changes.
Ian Anderson told us that councils often found it difficult "to
accept that their town centres need to go to something else and
that they are no longer places you would necessarily buy comparison
goods: jeans, clothing and footwear".
One consequence of this was that they were preserving primary
retail areas that were too large and needed to shrink.
Stephen Wright, from the John Lewis Partnership, a large retailer,
acknowledged this issue and said that it emphasised "the
benefits of a plan-led system and a council taking a strategic
overview approach to what is right in the specific parts of its
It is important that councils, in their local plans, recognise
the changing nature of retail in England. In particular, they
should take care not to preserve primary retail areas that are
too large for modern needs.
90. One thing hampering local authorities may be
the NPPF's statement that local plans should meet needs for retail,
leisure, office and other main town centre uses "in full
] not compromised by limited site availability".
Some evidence pointed to unintended consequences. The British
Council of Shopping Centres stated that it would lead to sites
being "brought forward in out-of-centre locations to meet
all the identified capacity over the development plan period,
even though the majority of this forecast capacity is occurring
towards the end of the development plan period".
The John Lewis Partnership argued that it was not feasible to
expect councils to "predict changing retail needs over a
15 year horizon".
We agree. The world of retail is changing fast, and councils risk
making themselves hostages to fortune if they allocate sites for
the full local plan period. Moreover, there is a risk they will
be forced to allocate out-of-town sites which give rise to development
that in hindsight proves not to have been needed, and in the process
diverts more business from ailing town centres. We recommend
that the Government remove from the NPPF the statement that needs
for retail, leisure, office and other main town centre uses should
be met in full in the local plan. It would be more sensible to
say that councils should allocate sites to meet needs over the
first five years, with regular reviews to keep the supply of sites
up-to-date thereafter, taking into account the expectation of
considerable changes in retail habits. Such an approach would
help councils to keep their planning policies up to date with
the rapidly changing dynamics of the retail sector and town centre
Permitted development rights
91. The Government's policy on permitted development
rights may also be inadvertently undermining councils' ability
to plan successfully for the future of their town centres. Since
6 April 2014, planning permission is no longer required for change
of use from a small shop (class A1) or a financial and professional
services building (class A2) to a dwelling house (class C3).
The then Minister for Planning, Nick Boles MP, stated that
he wanted "under-used shops to be brought back into productive
use to help breathe new life into areas that are declining due
to changing shopping habits".
Others questioned whether the Government's approach was appropriate.
Civic Voice said that "without these changes being appropriately
planned, we may well see areas of our towns changing without the
local community being able to input into the direction of that
The John Lewis Partnership similarly considered that permitted
development undermined councils' ability to plan strategically
for their high streets. It warned that the "piecemeal"
introduction of residential uses into town centres would "further
dilute the appeal and attraction of those centres to local residents
seeking shops and services".
92. The Government's decision to allow change of
use from classes A1 and A2 to C3 was based on sound intentions.
In many town centres the retail area is too large, and it may
be appropriate to reduce its size by converting shops and banks
into homes, especially where housing need is high. We consider,
however, that such changes should be driven by the local planning
process, so that local authorities can designate appropriate 'zones'
for retail and housing uses. Enabling change of use without planning
permission risks undermining the local plan and could lead to
the 'pepper potting' of shops and housing, making the town centre
an unattractive place to visit or, indeed, live. This is turn
could deter larger retailers from investing in town centres, leading
them instead to locate their developments out-of-town. We recommend
that the Government revoke the permitted development rights allowing
change from classes A1 and A2 to C3.
207 NPPF, paras 23-27 Back
NPPF, para 24 Back
NPPF, para 26 Back
NPPF, para 27 Back
Association of Convenience Stores, Retail Planning Decisions under the NPPF,
November 2013, Appendix A Back
Association of Convenience Stores, Retail Planning Decisions under the NPPF,
November 2013, p 3 Back
Town and Country Planning Association (NPP 164), para 4.1 Back
"High Streets 'are being failed by planning law'", The
Independent, 8 December 2013 Back
DCLG, Planning Policy Statement 4: Planning for Sustainable Economic Growth,
2009, page 21 Back
Q395 [James Lowman] Back
Leeds City Council (NPP 149), para 3.3 Back
Birmingham City Council (NPP 190), para 4 Back
DCLG, Planning Policy Statement 6: Planning for Town Centres,
2005, para 3.9 Back
Q417 [James Lowman and Stephen Wright] Back
British Council of Shopping Centres (NPP 228), para 3.1.12 Back
NPP 171 [John Lewis Partnership] Back
NPP 215 [Royal Town Planning Institute] Back
Welsh Government, Town Centres and Retail Dynamics: Towards a Revised Planning Policy for Wales,
April 2014 Back
Welsh Government, Written Statement - Planning for Town Centres,
14 October 2014 Back
As above Back
NPPF, para 23 Back
British Council of Shopping Centres (NPP 228), para 3.2.4 Back
John Lewis Partnership (NPP 171). Back
Town and Country Planning (General Permitted Development) (Amendment
and Consequential Provisions) (England) Order 2014 (SI 2014/564) Back
HC Deb, 6 March 2014, col 49WS Back
Civic Voice (NPP 196), para 36. Civic Voice was particularly concerned
about previously-introduced permitted development rights allowing
change of use from B1(a) (offices) to C3 (dwelling houses). Back
John Lewis Partnership (NPP 171) Back