Written evidence submitted by the Aldersgate Group [FPS 120]

The Aldersgate Group is an alliance of major businesses, academic institutions, professional institutes, and civil society organisations driving action for a sustainable and competitive economy. Our corporate members, who have a collective turnover in excess of £550bn, believe that ambitious and stable low carbon and environmental policies make clear economic sense for the UK.[1] They have operations across the UK economy and include companies such as Associated British Ports, Aviva Investors, BT, CEMEX, the John Lewis Partnership, Johnson Matthey, Michelin, Siemens, SUEZ, Tesco and Willmott Dixon.

We develop independent policy solutions based on research and the expertise and diversity of our members. Through our broad membership, we advocate change that delivers benefits to an ever-growing spectrum of the economy. 

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?

Transforming the current system can support an increase in transparency and in utilising digital strategies and tools, as well as address the risk that Environmental Impact Assessments (EIAs) do not necessarily lead to environmental improvements and that the current system has failed to deliver sufficient progress on targets and quality. While recognising these benefits, Aldersgate Group has a number of concerns around the proposed reforms outlined in the White Paper.

First, the categorisation of land in other countries has not lead to accelerated development, and in Germany and the Netherlands, which also have zoning systems, there are still large housing shortages. Secondly, there is a lack of clarity regarding environmental protection and how EIAs will continue to be carried out under the new sustainable development test, which will be imperative to ensure the UK meets its biodiversity gain objectives as set out in the Environment Bill. Thirdly, the diminished role of local authorities in the proposed plans is of concern, as centralisation could result in a loss of local knowledge and accountability, and put pressure on local councils which had already been experiencing capacity, skills and funding gaps before the COVID-19 crisis exacerbated these issues. Finally, further detail is needed to understand how the government will ensure new developments will begin working immediately to help the UK meet its net zero decarbonisation targets across energy, housing  and transport. These   points   will   be   crucial   in   ensuring   the   new   planning   system   involves development with high standards of sustainability that drive “performance as designed” and are fit for future climates.

Land Categorisation

The proposed land categorisation of Growth, Renewal and Protected is concerning for a number of reasons. Though we recognise that the proposed land categories aim to simplify planning for developers whilst addressing the different needs of land use in the UK, the Aldersgate Group is concerned that the proposals are too simple and do not recognise the complexity and interdependency of biodiversity and ecosystems, nor the value of protecting natural capital. Moreover, the Group is concerned that these proposed policy developments are not sufficiently aligned with of the forthcoming environmental improvement targets and proposals under the Environment Bill. They also do not address changes to land management set forth by the Agriculture Bill, which can in practice limit their ability to deliver on environmental improvements. These separate pieces of legislation should work hand in hand to help achieve existing climate and environmental targets.

As such we recognise that there may be a need for more than three zonal levels, which would add clarity to – for example – whether planning and development in National Parks could occur under the Protected category. We echo the call from some organisations for the Planning White Paper to add categories ‘Highly Protected Zones’ or ‘Wildbelt’ and ‘Nature Recovery Areas’ to its remit in order to give these initiatives regulatory footing.[2] To further protect biodiversity, the biodiversity gain as outlined in the Environment Bill should also be integrated into new planning reforms, with minimum gains determined for each land categorisation level and higher gains linked to the proposed ‘Growth’ category to offset lost natural capital.

In addition to protected areas, we believe greater clarity is needed on how Growth and Renewal zones will be monitored. With the latter, clear management will be required to ensure ‘gentle diversification’ does not result in increased populations and place pressure on associated services, such as waste management, or water supply and treatment.

Categorisation of all land types will need to be reviewed regularly to ensure that new evidence regarding a development’s impact on biodiversity is taken into account, or when a land’s designation may become untenable, to prevent this leading to abandonment and greater numbers of unused brownfield sites. Furthermore, there is a need for clarification on how long an area will be categorised as a ‘Growth’ or ‘Renewal’ area.

Finally, members have raised concerns as to the effectiveness of the proposed land categorisation in accelerating development, noting that in Germany and the Netherlands, which also have zoning systems, there are still large housing shortages.[3] As discussed above, it is imperative for government to question whether planning reform and principles such as land categorisation will be sufficient to meet housing targets, or whether additional interventions are required.

Sustainable Development Test

There is a lack of clarity regarding environmental protection and how EIAs will continue to be carried out under the new sustainable development test, which will be imperative to ensure the UK meets its biodiversity gain objectives as set out in the Environment Bill. Though the White Paper states that the test would be updated to include new requirements for assessment of the environment and viability, Aldersgate Group is concerned that an oversimplification of this process could reduce the opportunity for Environmental Impact Assessments to be carried out satisfactorily, and reduce time for input from experts (such as ecologists), specialist groups or local community members to voice concerns about the impact of a development on biodiversity or other environmental outcomes. Favouring speed over positive environmental outcomes, despite there being no evidence that environmental regulation is the cause of delays for building new homes (as have been demonstrated previously) and reducing the timeline, could lead to environmental damage. This risks affecting or inhibiting delivery of the Nature Recovery Strategy outlined in the Environment Bill. As such, the new sustainable development test needs to be designed carefully, to ensure sufficient time is allocated to allow stakeholders to input, and drive meaningful results.

To embed environmental impact evidence into the sustainable development test, the government could move away from the standard Environmental Impact Assessment (EIA) and instead begin to use an Environmental Improvement Test. This would make it easier for developers and other project stakeholders to determine whether the project will meet the biodiversity gain targets as outlined in the Environment Bill – a policy which Aldersgate Group welcomes, as the ‘no net loss’ approach taken so far has not helped to reverse environmental degradation. It would bake in an expectation for development to result in the conservation and enhancement of biodiversity. As such, any development which can demonstrate a clear environmental improvement result could be fast-tracked, whilst any which would lead to a net biodiversity or environmental detriment would be subject to a full EIA to address this.

The proposed plans do not say where within the planning process the new test will be applied. Given that this test currently happens at the end of the planning stage rather than the start, there is an opportunity here for the government to integrate any new sustainable development test at the beginning of any planning. This will help ensure that any homes built under the new planning framework are designed with environmental improvements in mind. Finally, through focusing on improvement the new planning system could create one path towards achieving strong sustainability and high beauty standards.

Clarification is needed to understand how the government will carry out sustainable development tests on each of the proposed land categories, and ensure that the same level of assessment will be carried out on Growth and Renewal areas as on Protected areas, particularly to ensure that renewal brownfield sites, which have been identified as areas for ‘gentle diversification’, are given the same level of assessment as Protected areas.

Local Authorities

The diminished role of local authorities in the proposed plans is of concern, as centralisation could result in a loss of local knowledge and accountability, and put pressure on local councils which had already been experiencing capacity, skills and funding gaps before the COVID-19 crisis exacerbated these issues. Given the role local authorities have had in these areas until now, there is a risk that significant knowledge and expertise in local government could be lost if planning is centralised and local councils take on a reduced role. For example, knowledge of locally sourced low carbon energy could be incorporated by local authorities into home decarbonisation plans if the planning system enabled local authorities to create and integrate local area energy plans into their Local Plans. Furthermore, local authorities have, until now, been able to set their own net zero targets, which may be overridden by national targets under the new planning system.

The role of local authorities in land categorisation and beauty appears to be limited. Under current planning legislation, local authorities have the ability to prohibit developments which are considered a blight to neighbours, but it is unclear whether the same rules would apply under the new plans, and the fast-track for beauty plans will be nationally determined. Furthermore, the White Paper only makes a small reference to how the Environment Bill will introduce Local Nature Recovery Strategies. Local authorities are best placed to determine the needs of their communities and have the best understanding of their local environment, and as such should have devolved responsibility over setting and implementing biodiversity and beauty targets.

There is also a need for clarity around the accountability of local authorities. It is important that the planning process retains local accountability and that communication lines remain open between local authorities and local communities affected, to reduce the risk of communities being unable to engage with the planning process despite new digitalisation methods. The government needs to outline a clear democratic process for planning which is transparent, and enables local authorities to work together to implement cross-boundary measures. If national level management policies are to be used, robust checks will need to be integrated into the organisational framework to ensure that the system does not become adversarial, that it responds to local needs, and that central government intervention is not used unnecessarily.

Making Homes Fit for Purpose and Reaching Net Zero

Aldersgate Group believes greater clarity is needed regarding how the government aims to ensure energy efficiency standards are set and met. Whilst we welcome recognition within the White Paper for homes to be net zero carbon ready, currently the plans appear to only ensure new developments are compatible with future technology, rather than requiring new homes and developments be built with net zero technology now. This approach will require extensive and costly retrofitting down the line and the lack of clarity can potentially discourage private investment in low carbon heating solutions. Twenty million homes are already in need of retrofitting in the UK[4] so instead of building new homes which do not meet net zero targets now, the proposals should clearly set out proposals that make them meet the UK’s net zero target now. As the Future Homes Standard aims to ban fossil fuel heating systems in new builds from 2025 in England (and 2024 in Scotland), the government’s new planning process will need to ensure planning frameworks address this. It will ensure developers are working to this timeline at minimum, which will provide certainty and drive progress towards the UK achieving its housing and heating climate targets.

Aldersgate Group asks whether the government has sufficiently considered retrofitting existing stock to increase the availability of quality housing, rather than relying exclusively on new builds. At present, no VAT is charged on new builds, but is charged at 20% on retrofits and reparations.[5] Recent events such as longer, hotter summer heatwaves and the COVID-19 crisis will not only change the way new homes should be designed, but also how existing stock will need to be retrofitted and designed, taking into account the increased use of the home as a workplace. Existing planning regulations has led to houses which lack natural light and fresh air – the latter of which is particularly important as summer temperatures continue to rise. As outlined in the Aldersgate Group report on net zero energy[6], VAT on deep retrofits should be removed to encourage greater uptake of retrofitting and improve housing stock for both summer and winter months. Currently, the government’s proposed planning system reforms risk continuing to prioritise new builds over retrofitting existing stock, but plans to address this issue would be welcomed as part of the upcoming National Design Code.

Transport

The Planning for the Future White Paper does not address how the government plans to integrate the decarbonisation of transport with the new planning system. There is a significant opportunity here, by ensuring that sustainable transport is incorporated into the planning of new homes and how homes can be accessible by public transport, rather than locking in car dependency. New housing developments also provide the possibility for developing adequate charging infrastructure for EVs, even for areas without off-street parking, given the lower costs of home-charging. Proposals under the current Planning White Paper should help deliver on the objectives of the government’s vision for the rapid charge point network in England published in May 2020 as well as the Budget £500 million commitment for EV charging infrastructure (see Aldersgate Group’s report on decarbonising transport here).

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?

The planning system, and associated environmental planning laws and considerations, are not necessarily the main causes of delays to development and construction of new build homes. Delays can also occur due to issues such as construction delays, and financial and staff cutbacks to planning departments and local authorities. Indeed, the Local Government Association has highlighted that councils approve 9 in 10 planning applications and that there are more than a million homes which have been given planning permission but have not yet been built.[7] The government needs to consider the impact of these factors too, particularly when considering the government’s ambitions to build 300,000 homes a year. Analysis has suggested that the proposed current reforms in the Planning White Paper may not lead to delivery of this target.[8] Government should show leadership and provide investment, particularly to ensure the provision of affordable homes, by addressing areas of concern in a revised White Paper. This can be achieved by outlining how local authorities will be supported to deliver new housing through the financing of skills and capacity improvements and involving those same authorities in a democratic approach of setting ambitious yet realistic targets.

Currently, the Planning for the Future White Paper states that a nationally determined minimum housing number will be set for each local authority, which will take into account the availability of each type of categorised land in that area. However, national government both reserves the right to overturn local approval decisions, and wants to create a market which can deliver 300,000 homes annually (one million this Parliament).

Nine in ten applications are approved by councils, with more than one million homes approved in the last decade waiting to be built.[9] As such, setting nationally determined targets will need to be done in acknowledgement of other barriers to development besides EIAs or planning timeframes, such as construction delays, financial and staff cutbacks to planning departments and local authorities, and Compulsory Purchase Orders.[10] As such, Aldersgate Group recommends that the government ensures full consultation has been carried out with local authorities, developers and other key stakeholders, to determine whether reforming other areas of development and construction could be more effective in enabling the government to deliver its housing targets.

October 2020