Build now, pay later

The Barker review of land-use planning has significant implications for the environment

It has to be wondered which Treasury wag chose July 4 to launch a report that many fear heralds a US-style deregulation of the planning system. Friends of the Earth planning campaigner Hugh Ellis isn't chuckling about Bank of England economist Kate Barker's review of land-use planning in England. "The next few months could be the end game for the planning system," he says. "This is crunch time."

The choices the government makes about the planning system over the next few months could have a profound impact on the environment and the extent to which the drive to boost economic competitiveness is allowed to rule the roost.

The widespread concern about Barker's review is rooted in a string of recent statements about planning that have emanated from the Treasury and No 10. Gordon Brown promised substantial planning reform in his Mansion House speech last month, having already said he was worried about the impact of planning curbs on the productivity of the UK's retail sector. And Tony Blair used a recent article to show that, on planning at least, he sees eye to eye with his Downing Street neighbour. To add to the sense of impending revolution, the trade and industry secretary, Alistair Darling, last week identified planning as holding back new nuclear power stations.

In fact the planning system has been in the government's sights for a long time. As far back as 1998, consultants McKinsey published a report for the Department of Trade and Industry detailing how planning was acting as a brake on the UK's economic competitiveness. Persistent lobbying on the issue by the Confederation of British Industry led to Brown commissioning Barker to conduct this review last December. She presents her final recommendations in the autumn. And since May's Cabinet reshuffle, deputy prime minister John Prescott, who has held the planning brief for much of the last decade, is no longer in a position to keep the Treasury at bay.

Henry Oliver, head of planning at the Campaign to Protect Rural England, says there is a relentless campaign against planning, and in favour of unregulated development, at the highest level. "It is driven by a narrow vision of economic competitiveness. On planning, the government seems to be in a state of permanent revolution, it's clear that the chancellor has little time for the environment."

The extent to which events have moved is illustrated by the way that the likes of Oliver view Barker. Two years ago, the economist was the bête noire of many environmentalists, following the publication of her earlier housing supply review and its recommendation that there should be a dramatic increase in house building. Now Barker is seen by many as the only figure able to temper full-blown planning deregulation.

Environmentalists are heartened by the report's executive summary, which balances the competing pressures of economic competitiveness and environmental sustainability. The report largely consists of an analysis of the impact of planning on the economy, rather than a set of firm recommended reforms.

But the tentative conclusions outlined in the 200-page report offer some pointers to where Brown might seek reforms when Barker does present her final recommendations. The report finds that recent changes to the planning system have not speeded up the decision-making process, which it says remains too complicated.


Stronger role

Worrying for environmentalists will be the report's conclusion that the proportion of Britain protected from development by national and European Union environmental designations, such as the green belt, is twice the Organisation for Economic Cooperation and Development average. The report places a further question mark over the green belt by suggesting that the growth of towns and cities leads to the development of wildlife-rich sites over less valuable open space beyond the urban boundary. It also suggests that the government should have a stronger decision-making role in deciding where major infrastructure projects, such as power stations, should be located.

But the most worrying news for anyone concerned about the environment is likely to be Barker's decision to focus on how the planning system can become more sensitive to "price signals" - in other words easing the release of sites in response to market pressures.

The report finds scant evidence that the supply of offices, factories and shops is out of kilter with demand. In London, where demand is greatest, it shows that the amount of floor space that has planning permission exceeds the total under construction. Nevertheless, focusing on where development is cheapest is likely to lead to pressure on existing policies that favour expensive town centre sites.

The Treasury is concerned that an inefficient retail sector is undermining the UK economy, based on figures contained in the Barker report showing that UK shops are 20% less productive than their counterparts in the US. The report says the most productive shops are single-storey 3,000sq metres-plus retail units, which are difficult to accommodate in sustainable town centre locations.

It says the curbs prevent competition by making it harder for smaller firms to enter the market, and suggests that instead of preventing out-of-town development, councils should work harder to improve the quality of high streets. It also blames the growth of homogeneous "clone towns" on out-of-town curbs, saying that restrictions on the supply of floor space drive up rents in more central locations out of the reach of smaller, independent retailers.

Guy Rubin, a senior researcher in the local and regional economies team at the New Economics Foundation, is worried by the implications of the report. "A lot of the vestigial controls that have just about stopped the worst effects of out-of-town retail are in danger of being put back by this focus on competitiveness and productivity," he says.

Former Labour planning minister Nick Raynsford sees the fingerprints of the US free market economic theory that is popular in the Treasury on the report's analysis of the retail sector. He says the flipside of productivity gains in the US has been continuing urban decline. "[Those at the Treasury] have never walked around a deprived community in a northern city. They come up with theories that are totally divorced from reality in the UK," he says, adding that the productivity costs must be balanced against the sums involved in regenerating communities.

He and many others will be hoping that July 4 won't be remembered as the point when the UK planning system becomes subject to the free market., 12.07.2006

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