Written evidence submitted by Accessible Retail [FPS 053]
Introduction
This evidence is submitted on behalf of Accessible Retail (AR). AR is the trade body which represents the retail parks and warehouses sector of the retail industry. We have over 1200 members comprising retailers, developers, owners/investors and advisers, including most of the major companies active in the sector.
Retail parks and warehouses comprise one of the three major retail sectors. We play a significant role in the economy and many of our members trade across Europe and beyond. The sector accounts for some third of total retail spend and comprises the largest part of investment grade (prime) retail commercial property. Our sector employs some 750,000-800,000 people in the UK.
We have addressed only the questions relevant to our industry and our views are drawn from the evidence we have submitted in response to the Government’s consultation on Planning for the Future.The Committee invites evidence on the following issues:
Comments on Questions
1.Is the current planning system working as it should do? What changes might need to be made? Are the Government’s proposals the right approach?
The three characteristics most associated by our members with the current system are cost, delay and uncertainty, all of which impact deleteriously on the development industry’s ability to provide the buildings the nation needs.
We share the Government’s view that the planning system in England needs ‘root and branch’ reform and agree a simpler and faster planning system is needed to support and enable the Government’s aspirations for economic growth, employment creation and the provision of housing, together with appropriate infrastructure.
In particular, we welcome:
We are very concerned though, that the proposals seem to have been influenced mainly by the need to boost the supply of new homes. Little mention is made of the importance of the planning system in enabling industry and commerce to prosper and grow by allocating sufficient suitable land for employment use. Yet, jobs are as essential to the creation of sustainable communities as homes.
Pressures for more housing land, however, mean employment land is often being squeezed. This is particularly true of out of town retail parks which are increasingly being identified (e.g. by the Mayor of London) as areas of low density development and damaging to town centres and suitable therefore for change to residential use.
It is essential the proposed zones are able to plan effectively for the renewal of commercial estates including retail parks which are often located in ‘protected’ areas outside built up areas within the green belt or on urban fringes?
In the case of our industry, the rate of change in the physical requirements for retail premises is rapid, as is the trend towards destination planning including possibly the introduction of mixed use. Can the proposed system deal with such rapid changes or will it facilitate the removal and redevelopment of retail parks with disastrous implications for the retention of retail employment?
We support the proposal to set development management policies centrally as this will give much more certainty to owners and developers about what is permitted. The Government’s alternative proposals are not supported as they would weaken this gain.
In principle, we view favourably a new test of sustainability provided the new approach achieves gains in simplicity. In keeping with our above comments, ensuring the protection of land uses such as retail parks and warehouses capable of providing sustainable employment land should be one of the key aims of the new ‘sustainable development’ test. This requires an appropriate balance to be struck between housing and commercial land uses.
Recommendation. In working up its proposals in detail, the Government should demonstrate how the new local plan system will (a) protect existing sustainable employment land and (b) ensure future provision of suitable and adequate land for commercial businesses.
Providing for employment has always been important but, following the substantial loss of jobs due to the pandemic (many likely to be permanent), it has become even more so. In a difficult economic situation, it is crucial that local pans nurture and protect all commercial centres which can provide sustainable employment going forward. We believe this should become a major aim provided for in the NPPF.
Retail parks and warehouses satisfy this new economic imperative. The sector employs a large number of people in a wider and more diverse range of jobs (including part-time positions, gender diversity and good training) than in most other primary employment sectors.
Further, although all three main retail sectors including out of town have been damaged by intense competition from online and the pandemic lockdown restrictions, retail parks and warehouses have proved more resilient than shopping centres and high streets in sustaining trading and, therefore, in keeping jobs.
This important sustainable employment role of retail parks and warehouses will be maintained as the restructuring of ‘bricks and mortar’ retail multiples, driven by the twin competitive pressures of online and high cost/inefficient town centre and high street stores, permanently reduce substantially their retail offer and its accompanying employment in town centres and high streets. .
Maintaining current local plan and national policies directing bricks and mortar retail into town centres which no longer meet its business requirements will not change this. Just as has happened in other industries (e.g. manufacturing), the terms of trade have changed. Now, the key to securing the future of our vital town centres and high streets lies in diversification into other uses and increasing residential presence.
Recognising this and given the importance to employment of maintaining as large a retail industry as possible, we suggest national policy on retail should change to protecting and encouraging sustainable retail employment wherever it is located. This policy criterion is met by retail parks and warehouses.
Recommendation. In a post pandemic economy in which job retention will be a critical element of economic recovery, the Government recognises that retail parks and warehouses are an important source of sustainable jobs which should be protected and nurtured in local plans.
2.In seeking to build 300,000 homes a year, is the greatest obstacle the planning system or the subsequent build-out of properties with permission?
No comment.
3.How can the planning system ensure that buildings are beautiful and fit for purpose?
We share the aspiration that quality and beauty lie at the heart of the development process, but we have concerns regarding who compiles design codes and their expertise and the extent to which they are might become overly prescriptive because of a lack of skilled staff able to interpret enabling principles to produce good design.
Current local design codes and the National Design Guide are concerned primarily with residential developments not commercial estates and we question their applicability to commercial uses with very different physical characteristics to homes.
The proposals state that it is important that local codes and guides are prepared where possible, and that these will primarily be brought forward through local plans, neighbourhood planning groups, and applicants bringing forward proposals for significant new development areas.
We support community involvement, but not community approval or a lead role in bringing design guides forward for commercial property and estates. Residential communities are diverse with different opinions and not necessarily expert in identifying good design and can equate good with familiarity and local character rather than excellence.
Rather, particular care needs to be taken with input into design codes for commercial buildings. In our industry, to meet the challenge of more tax-efficient on-line trading, the design of ‘bricks and mortar’ retail buildings must be functional and affordable i.e. meet the needs of their occupiers, owners and sometimes that of their funders as well.
In general, design should not be prescriptive, but a process undertaken by qualified and experienced professionals with support from key local stakeholders including communities and local government structures. Tight design criteria could be to stifle creativity and innovation. Further, as is often the case, local authority planning departments do not have the requisite skills to sensitively apply design codes.
We would encourage the government and planning authorities to embrace light touch design codes, that guide and inform rather than stipulate and require.
Recommendation. Any central role given to local communities in deciding the form and content of design guides should be restricted to development within residential areas. Outside of such areas, the role should be consultative only.
We agree with the establishment of a support body bearing in mind that design skills are scarce generally, but particularly in local planning authorities. However, we do not support the Government’s proposal that a chief officer for design and place-making should be appointed to every local authority. The ultimate authority for the exercising of a planning opinion or decision must remain with the Chief Planning Officer who can take design into account together with other relevant planning considerations.
Lastly, beauty is only one of many considerations which result in good planning and development. The planning process should seek to deliver positive social, economic, and environmental outcomes. Providing a fast track that prioritises compliance with design stipulations may create unexpected results for other important elements of the development process.
4.What approach should be used to determine the housing need and requirement of a local authority?
No comment.
5.What is the best approach to ensure public engagement in the planning system? What role should modern technology and data play in this?
We support the Government’s aim to modernise and digitalise the planning system are welcome. We agree with the approach of creating a modular software landscape, as this should allow the software to keep pace with technological development.
Access via LPA websites will help improve community involvement provided all local authorities utilise a standard design and approach for their planning websites. This is not the case at present; some sites are well designed and easily accessible, but others are difficult and frustrating for users to find and access information and do not have up-to-date information. Consideration needs to be given as to how detailed information covering large geographical areas can be made legible and easily joined up on the small computer screens typically owned by members of the public.
6.How can the planning system ensure adequate and reasonable protection for areas and buildings of environmental, historical, and architectural importance?
No comment.
7.What changes, if any, are needed to the green belt?
No comment.
8.What progress has been made since the Committee’s 2018 report on capturing land value and how might the proposals improve outcomes? What further steps might also be needed?
We believe the current system needs simplification. However, as the experience of CIL which has undergone significant modification exemplifies, reflecting the different development economics of different locations and types of development in a simple overall tax is very difficult to achieve. All development taxes of the post war era including betterment and DLT became virtually ineffective in the face of complexity over valuations and trigger points such as when occupation occurs.
In our view, alongside any new system there still a need for S106 payments to meet their original intended purpose of mitigating the impacts of development on adjacent land site and ensuring they are connected to nearby infrastructure.
While we support simplification, we do not support extending the financial burden on business through increasing the tax take from development. Government’s own data shows that developers already pay 25-50% of their profits in planning taxes or in kind (i.e. affordable housing) which together with corporate taxes, makes the development industry one of the most highly taxed in the UK.
Contrary to popular opinion, developers are not the cause of the need for new development. The projects they promote are in response to external economic/consumer pressures (e.g. population growth, obsolescence in buildings, new consumer trends etc.), or to the Government own policy initiatives (e.g. to build a further 300,000 homes, renew ageing existing social infrastructure etc).
We accept It is proper to tax development as all commercial activity is taxed in some way, but it is wrong to further shift the burden of providing affordable housing and social and strategic infrastructure away from the principal beneficiaries (the public and communities). If more resources are needed to meet these needs, the Government should look to raising the additional money from general taxation and council tax (the multiplier of the latter has remained unchanged for decades).
For this reason, we oppose giving local authorities the ability to spend infrastructure levy funds on other council services. Once established, it will inevitably lead to local authorities campaigning to increase the levy to meet increased resource demands for other non development related services in addition to further funds needed for new infrastructure needs.
Recommendation. If the Community Infrastructure Levy and Section 106 planning obligations are replaced with a new consolidated Infrastructure Levy, (a) the new tax should be fiscally neutral i.e. it should raise no more money from development than the present system and (b) the monies it raises should continue to be restricted only to funding related infrastructure.
Regarding the operation of any new system, we have concerns about how levy rates would take account of the different levels of profitability/viability between residential and commercial development and between brownfield and greenfield sites.
Similarly, a national levy would not take account of the different development economics of locations across the country or be set at different levels for different assets. Also, site assembly costs are different for brownfield and greenfield and it is not clear in the proposals whether the increased costs for assembling brownfield will be considered when the new proposed tax is set.
We support the need for reform, but only one that reflects these differences between locations and types of development.
We are concerned that final value assessment could create significant risks and uncertainty which would affect forward funding and wider goals for development.
Also, while paying the levy at the end of the development process has cashflow attractions, it would raise considerable challenges around trigger points and valuations for raising development finance.
We believe there are risks in collecting a levy at the end of the development process. Schemes may not progress at all, or be delayed, and dependent on broader economic conditions values may not raise the same as was anticipated when funds were borrowed.
Any new system ned to be sufficiently sensitive to all these important differences.
Recommendation: In working up its proposals in detail, the Government should consider (a) how different development scenarios with different levels of profitability will be fairly handled and (b) whether collecting the levy at the end of the development process will hinder rather than promote a more certain development process.
W A McKee
CEO