Repeat after me: the planning system isn’t just about housing.
Any country needs adequate modern space for ensuring that goods of every description, basically everything around us, can be efficiently and quickly delivered to their destination. Of course we are more reliant than ever on complex, often international, supply chains and in recent years we have seen how sensitive they are to disruption. Locational, operational and energy efficiency is also key to minimising the costs which ultimately will be borne by the consumer. We know all this. And yet somehow there’s a disconnect when we need to think about planning for the necessary floorspace, whether in large modern, often highly automated, high-bay warehouses or in “last mile” urban logistics hubs.
Last year the British Property Federation, in conjunction with Savills, published a great explainer document, Levelling Up – The Logic of Logistics.
planning decision taking and the applications process
how the planning system can support specific policy priorities, including:
supporting supply chains
decarbonisation of freight
heavy goods vehicle (HGVs) driver parking facilities and welfare
strengthening the Union
I know that the DfT is very much wanting to hear positive suggestions as to how the system can be made to work better.
Last Tuesday my Town Legal colleague Paul Arnett recently co-hosted, alongside Quod, a roundtable meeting attended by a number of operators and developers in the sector, together with those in the public sector.
Some interesting comments were made. For instance:
Conceptually the way in which the local plans system struggles, without a more strategic plan making tier, with assessing and planning for the larger than local need for logistics space. Often the need for development at particular locations is driven by geography and road/rail/port access rather than particular local needs, unlike with perhaps housing and other forms of employment development.
The current failings of the NSIP process, save in the case of strategic rail freight.
Other calls on space, by way of for instance data centres and dark kitchens, reducing that which is available for freight and logistics.
The benefits of clustered development, several facilities in one location, in terms of employment, public transport and power.
The challenges in making the case to local planning authorities for the associated facilities required, for instance in some locations a higher than usual level of car parking to allow for occupiers with workers on night shifts and for the overnight re-charging of electric vehicles (in the case of operators who traditionally may have expected staff to store their petrol or diesel vehicles at their homes overnight).
There was much talk of the challenge of securing sufficient power, by way of connections to the national grid and how critical this has become, with many operators already making the move to all electric fleets, and with of course the extent of roof PVs.
The discussion became topical when the prime minister was bounced by leaks into making his speech on net zero the next day (20 September 2023).
I had come out of that roundtable session wholly enthused by the degree to which the corporate participants were so advanced with their thinking on decarbonisation and net zero. To listen the next day to Rishi Sunak was like going back in time (for some of us it probably triggered memories of the scrapping of the code for sustainable homes at a time when the house building industry was well on the way to delivering on what was being required – these sorts of changes to previously announced regulatory changes are debilitating to business in a way that governments do not seem able to grasp). Maybe I’ll leave further commentary on that particular statement to another place, save for highlighting one positive passage from that speech:
“Right now, it can take fourteen years to build new grid infrastructure.
There are enough projects waiting to be connected to generate over half of our future electricity needs.
So, I can announce today that the Chancellor and Energy Security Secretary will shortly bring forward comprehensive new reforms to energy infrastructure.
We’ll set out the UK’s first ever spatial plan for that infrastructure to give industry certainty and every community a say.
We’ll speed up planning for the most nationally significant projects.
And we’ll end the first-come-first-served approach to grid connections by raising the bar to enter the queue and make sure those ready first, will connect first.”
Spot-on. Now let’s make all that happen. Because it is all about the actual logistics.
Simon Ricketts, 23 September 2023
Personal views, et cetera
Extract from cover of BPF/Savills Logic of Logistics document
Will the Government’s proposed planning reforms help bring forward more logistics floorspace, for which there is an acknowledged and unmet need? We’ve been talking about the housing crisis (now apparently – wrongly – seen by Michael Gove as a “not enough home-owners” crisis) for so long now but what about the need for other land uses? Logistics (warehousing and distribution in old money) is a prime example. It has to be accommodated in the wider public interest – unless we are going to change radically our economy, life style expectations and the way in which we source much of our food and other products – but has locational constraints and the need is not necessarily “local”. How do we make sure that deliverable sites are allocated or can otherwise come forward?
Land-hungry as it can be, and sometimes competing for sites which might otherwise be released for residential development (meaning that clear policy guidance is particularly important), there are various reasons why more “big box” and “last mile” logistics space is needed. For instance:
⁃ the structural change in shopping patterns, with a huge move, accelerated by the pandemic, towards on-line retail.
⁃ the drive on the part of operators towards more efficient, better located and sustainable modern facilities – ideally rail-connected, certainly increasingly automated.
⁃ Post-B****t changes in delivery networks and the urgent need for more resilient supply chains, demonstrated by recent temporary product shortages
a) set out a clear economic vision and strategy which positively and proactively encourages sustainable economic growth, having regard to Local Industrial Strategies and other local policies for economic development and regeneration;
b) set criteria, or identify strategic sites, for local and inward investment to match the strategy and to meet anticipated needs over the plan period;
c) seek to address potential barriers to investment, such as inadequate infrastructure, services or housing, or a poor environment; and
d) be flexible enough to accommodate needs not anticipated in the plan, allow for new and flexible working practices (such as live-work accommodation), and to enable a rapid response to changes in economic circumstances.” (paragraph 82).
The Government’s planning practice guidance is more specific:
“How can authorities assess need and allocate space for logistics?
The logistics industry plays a critical role in enabling an efficient, sustainable and effective supply of goods for consumers and businesses, as well as contributing to local employment opportunities, and has distinct locational requirements that need to be considered in formulating planning policies (separately from those relating to general industrial land).
Strategic facilities serving national or regional markets are likely to require significant amounts of land, good access to strategic transport networks, sufficient power capacity and access to appropriately skilled local labour. Where a need for such facilities may exist, strategic policy-making authorities should collaborate with other authorities, infrastructure providers and other interests to identify the scale of need across the relevant market areas. This can be informed by:
• engagement with logistics developers and occupiers to understand the changing nature of requirements in terms of the type, size and location of facilities, including the impact of new and emerging technologies;
• analysis of market signals, including trends in take up and the availability of logistics land and floorspace across the relevant market geographies;
• analysis of economic forecasts to identify potential changes in demand and anticipated growth in sectors likely to occupy logistics facilities, or which require support from the sector; and
• engagement with Local Enterprise Partnerships and review of their plans and strategies, including economic priorities within Local Industrial Strategies.
• Strategic policy-making authorities will then need to consider the most appropriate locations for meeting these identified needs (whether through the expansion of existing sites or development of new ones).
• Authorities will also need to assess the extent to which land and policy support is required for other forms of logistics requirements, including the needs of SMEs and of ‘last mile’ facilities serving local markets. A range of up-to-date evidence may have to be considered in establishing the appropriate amount, type and location of provision, including market signals, anticipated changes in the local population and the housing stock as well as the local business base and infrastructure availability.
Paragraph: 031 Reference ID: 2a-031-20190722”
The reality is that very often local plans have not kept pace with the extent of need. I wrote about two decisions by the Secretary of State to allow appeals in relation to large logistics proposals in the green belt, in Bolton and Wigan in my 25 June 2021 blog post The Very Specials.
As somewhat of an advocacy document for the sector, the BPF industrial committee published in January 2022, in conjunction with Savills, Levelling Up – The Logic of Logistics, a “report demonstrating the wider economic, social and environmental benefits of the industrial & logistics sector”, going into detail with facts, figures and examples as to the extent of the current need and extent of historically supressed demand, the functions of logistics space in the economy, the nature of the jobs created, sustainability credentials and its potential “levelling up” role (was this indeed a factor in those Bolton and Wigan decisions?).
The document repeats from the BPF’s Employment Land Manifesto (July 2021) what changes are sought to the planning system:
“■ Introducing a Presumption in Favour of Logistics Development … when precise criteria are met. This is needed as Local Plans can take years to be adopted and therefore are completely out of kilter with the pace of market changes;
■ Ensuring Local Plans allocate sites in the right locations to respond to a broad range of market needs;
■ Modernising Employment Land Reviews to allow for the utilisation of ‘real time’ information so that they can be kept up to date; and
■ Introducing an Employment Land Delivery Test to ensure that a commensurate amount of employment land is brought forward to counterbalance housing and that any employment land lost to other uses is delivered in the right locations. If a local planning authority failed to meet the delivery test, a presumption in favour of sustainable logistics development could be engaged.”
My 14 May 2022 blog post Does LURB Herald A More Zonal Approach to Planning After All? focused on housing issues but the risks are at least as great for logistics (and indeed industrial development more generally and of course often the boundary lines between light industrial, general industrial and logistics are increasingly blurred). With a planning system which is even more plan-led, where planning decisions are to be made in accordance with the development plan and national development management policies “unless material considerations strongly indicate otherwise”, and with the duty to co-operate with other local planning authorities abolished, logistics promoters will have to put all their faith in each local planning authority making the right choices, in an environment where this form of development, often necessarily on green field sites, can often be locally unpopular. Might national development management policies indeed point towards a criteria-based presumption on certain types of unallocated land? We just don’t know.
Of course, it may be that we start to see some large logistics schemes go by way of the Planning Act 2008 NSIPs route, requiring a direction first from the Secretary of State that the project is indeed to be considered a nationally significant infrastructure project. However, until such time as the procedure is reformed, it is an enormous undertaking in terms of process. The track record for business and commercial DCOs is not good: two sought, two withdrawn! The DCO application for the London Resort theme park in Kent was withdrawn on 29 March 2022 and on 13 April 2022 the Secretary of State withdrew (at the request of the promoter, so that the proposal could continue by way of a Town and Country Planning Act application for planning permission) the direction that he had previously made that phase 2 of the international advanced manufacturing park (IAMP) proposal in Sunderland be treated as an NSIP. Of course, the position for rail-connected logistics schemes which meet the tests in section 26 of the 2008 Act for a strategic rail freight interchange is more positive, with four DCOs made to date (Daventry, East Midlands Gateway, Northampton Gateway and West Midlands Interchange).
We will be discussing many of these issues on clubhouse at 6 pm on Tuesday 24 May, where we will be focusing on the BPF’s Levelling Up – the Logic of Logistics report and, in particular, the likely prognosis for industrial and logistics development under the planning reforms now announced. I’ll be joined by Gwyn Stubbings (GLP) and Ben Taylor (Newlands) from the BPF’s industrial committee, together with the BPF’s head of planning and development Sam Bensted. Join us here.
A little further ahead, please also consider registering for a Town Legal/Landmark Chambers webinar (yes a good old fashioned 2020-style webinar…) at 5 pm on Monday 6 June back on the theme of housing: “Will the Bill deliver more or less housing? Yes or no?” Simon Gallagher (Department of Levelling Up, Housing and Communities) will join Zack Simons (Landmark Chambers), Kathryn Ventham (Barton Willmore now Stantec) and myself in a session chaired by Town Legal’s Meeta Kaur. Join us here.
Simon Ricketts, 22 May 2022
Personal views, et cetera
Image from Levelling up – the logic of logistics, courtesy of the BPF and Savills
SIMONICITY 