Is Momentum Building for Reform in the Commercial Property Industry?

Posted on 17 September, 2011 by MOVEHUT

The issue of planning reform, a common thread in commercial property circles, rumbles on. Days after Chancellor George Osborne and Communities Secretary Eric Pickles wrote a piece in theFinancial Times, calling for a simplification of the process, labelling it ‘key to our economic recovery’, the British Chamber of Commerce (BCC) has released its own take on the matter.

The BCC has carried out a survey of over 5,300 member businesses, among them many commercial property developers who have been ‘dramatically affected’ by planning procedures. As a result the BCC called ‘for a reasonable debate on the issue and hopes to remind pressure groups and ministers that the current complexity, cost and uncertainty of the planning system remains a major barrier to local economic growth in every part of the UK.’

The survey found almost seven in ten (69%) experienced applicants (those who have applied on several previous occasions) believe commercial property planning decisions are influenced by politics, rather than judged simply on merit.

Over half (54%) believe planning committees’ decisions on commercial property developments are made contrary to planning officer recommendations. Almost three quarters (73%) say they have never been consulted by local authorities over their views or opinions on the commercial property planning processes.

The BCC speaks of a ‘significant’ depressed demand from businesses seeking to expand commercial property operations. Over one in ten (11%) have never applied for planning permission, citing cost, complexity, delays and expectations that they would not be given the go-ahead.

The BCC calls for a ‘simplified national network’ to eradicate the current system, which is said to deliver ‘contradictory outcomes, additional costs, and barriers to growth in many areas’. The idea that reform would lead to a commercial property free-for-all, where buildings would spring up everywhere, is challenged. A call is made to ‘get the debate on planning reform away from hysteria and back to common sense’. The UK’s areas of great beauty and natural diversity are cited as reasons why ‘it’s not a case of throwing the rulebook out to grow the economy at any cost’. John Longworth, Director General of the BCC, commented that ‘business’s experience of planning on even the most modest developments’ of commercial property and other projects show ‘the system and its bureaucracy are a serious brake on economic growth, prosperity and jobs’.

Prosperity is the key message in the original Financial Times piece, which is headlined ‘Planning reforms boost local power and growth’. The tone is firmly on reform of the ‘failed planning system’ and it is pointed out that, since 1947, commercial property developers and other lucky readers have had 3,250 pages of ‘inexorably more complicated’ guidelines issued.

The article goes on to highlight the high price of obtaining commercial property planning permission in London compared to other European cities. London is highlighted as being twice as expensive as Paris, and ten times that of Brussels. In an era of globalisation, these figures underline the risk of UK commercial property missing out on international investment and domestic enterprise opportunities.

The prospect of the commercial property industry benefitting from a proposed National Planning Policy Framework is raised. This would be one document, reducing policy from 1,000 pages to fewer than 100, showing ‘a way for swifter, clearer decisions’. Central to the framework would be a ‘presumption in favour of sustainable development’. Using this approach, commercial property developers could expect a yes to any proposal ‘unless there are strong reasons to the contrary’.

The authors are keen to underline the government’s willingness to debate the changes. The likelihood of commercial property springing up on green belt, National Parks or Areas of Outstanding Natural Beauty is ruled out. A reference to the Localism Bill, which has been heavily reported in the commercial property media, is accompanied by a nod to ‘neighbourhood planning’, and a reminder that the government anticipates communities will ‘soon have the chance to say where they want new shops, homes and businesses’.

Does all this mean a period of sustained commercial property construction is on the horizon? Not if some members of Parliament have their way. During a recent debate, a Labour MP proclaimed the potential changes as a ‘charter for sprawl’. Publishing the draft during the summer, when MPs are on summer holidays, led another to accuse the government of attempting to ‘steamroll through’ the changes.

The Campaign to Protect Rural England is on record as saying ‘The Treasury’s ill-informed intervention in the [commercial property] planning debate reinforces the sense that the government’s planning reforms are more about boosting short-term growth figures than about truly sustainable development.’

According to the BBC, Greg Clark wants ‘the fullest possible debate on this’. The Planning Minister is due to meet opponents of the proposals for further discussions, where more developments are expected. Whether these will be the commercial property bricks-and-mortar type of developments appears uncertain.


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