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How can we help solve the UK’s looming lack of employment land crisis?

 

There is ongoing concern that the UK is facing and fuelling a significant shortage of employment land. In Autumn 2017 the Institute of Economic Development (IED) first drew attention to this looming employment land crisis. At around the same time the British Chambers of Commerce (BCC) highlighted the same issue and, with concerns continuing to be reported, it is clear that the issue is not going away.

The two organisations have therefore joined forces to explore whether there are practical and policy solutions to avert this crisis. A roundtable event brought together a range of stakeholders with representation from the IED, BCC, Ministry of Housing, Communities and Local Government (MHCLG), The LEP Network, Local Government Association (LGA) and Royal Town Planning Institute (RTPI) to debate the issue and seek to move the discussion forward from articulating the problem to identifying solutions.

There was broad consensus that the challenges are complex, including the overwhelming focus on housing which permeates the whole system; rapidly changing occupier needs and therefore the suitability of existing sites; and a range of supply side/delivery constraints including the intentions of landowners and viability. In summary, there are both issues in the planning and policy arena, and with delivery.

The focus on housing was a central topic of discussion. Whilst it was noted that the revised National Policy Planning Framework (NPPF) itself gives strong weight to supporting economic growth and does not propose a bias towards housing, it was accepted that in practice and through other policy and action there is a clear emphasis on housing; and, as a result, there are clear negative unintended consequences for the delivery of employment land. Examples were cited of City Deals, Growth Deals and other key funding and delivery-focused activity which is heavily centred around housing with often a much lesser focus on employment sites and premises.

The need for active public sector delivery also featured highly. Discussion highlighted that over the last 15-20 years what was English Partnerships, with a clear remit to deliver both employment and housing sites, has been steadily changed as it became the Homes and Communities Agency and now Homes England, to focus purely on housing. Examples of major sites that had been brought forward cited in the discussions were frequently those supported through the Regional Development Agency and English Partnerships era, suggesting the loss of a public sector delivery focus is a real area of concern. It was noted that the delivery of employment land was now such a concern that it was featuring highly in some Local Industrial Strategies as one of the major priority needs. This is welcomed.

The sophistication of the planning debate around housing was noted as being far greater and better resourced by both public and private sectors than for employment, illustrated by engagement in employment matters at Local Plan Examinations. The roundtable highlighted as an example the much clearer and better understood process of how to justify exceptional circumstances for greenbelt release for housing in comparison to employment. As a result, it is much harder to secure release of sites for economic and employment development.

There is significant concern as to the impact of Permitted Development Rights (PDRs) on the supply of employment premises, particularly in respect of potential extensions of these rights. Whilst there are some examples of positive impact, where secondary stock has been taken out of the market and development viability has improved, there are clear fears that allowing the wholesale redevelopment of employment sites for housing is a step too far (note: since the event the majority of proposed extensions to PDRs have been announced by Secretary of State for Housing, Communities and Local Government James Brokenshire as part of the Spring Statement. However, extension to include the demolition and total redevelopment of office buildings for new homes is still under consideration).

The need to improve linkages between Local Plans and economic development aspirations was discussed. It was noted that revised NPPF is more explicit of the need for effective cooperation with Local Enterprise Partnerships (LEPs) and it was recognised that Strategic Economic Plans (SEPs) have become more realistic (as opposed to aspirational lobbying documents) as LEPs have matured. It is anticipated that this will enable much better alignment than was evident a few years ago when SEPs were effectively bid documents without the level of evidential rigour required of the plan making process.

A number of potential solutions were called for within the discussion: How can we help solve the UK’s looming lack of employment land crisis?

1. For the government to recognise that there is a problem and for the pendulum to swing back to a much more balanced position that does not disadvantage employment development. This needs to include much stronger messaging in support of employment development.

2. For a stronger public sector focus on the use of public land and delivery support to enable employment sites. For example, the inclusion of an employment brief for Homes England to ensure there are sites to accommodate the jobs for residents of new homes.

3. To improve the quality and consistency of employment monitoring so there is improved evidence on which to inform planning policy and decision-making.

4. To consider the introduction of a five-year employment land supply approach, similar to that for housing, to ensure a ready supply of deliverable sites and much clearer evidence of need that could support greenbelt release.

5. That there is no further broadening of PDRs to support the protection of existing employment supply.

An offer of a working group to act as a sounding board to MHCLG on the employment land issue was also extended by the IED and BCC. A meeting between the BCC Expert Panel and Steve Quartermain, Chief Planner at MHCLG, has now been arranged to follow up on many of the action points that emerged from the session. The IED and BCC are exploring whether there are other ways to move this issue forward.

Stuart Hardisty is a Director of the Institute of Economic Development. This article summarises the IED and British Chambers of Commerce roundtable on employment land shortages held at Indigo Planning on 27th February