“Growth is the defining mission of this government,” the prime minister said at the start of this year, promising to “kick down the barriers to building, clear out the regulatory weeds and allow a new era of British growth to bloom”.
In line with this ambition, early in March the government published its long-trailed Planning and Infrastructure Bill, a flagship piece of legislation for the government’s growth agenda, which aims to streamline the planning process and remove barriers to development.
As an investor with 33% of our assets under management in the UK, we wholeheartedly agree on the urgent need for change. We have seen first-hand how planning erects barriers to investment in key growth sectors such as infrastructure and clean energy.
Getting this bill passed with the right reforms and seeing these implemented will materially improve the investment case for UK assets, including from pension funds like ours.
Under the existing system, the planning process is expensive, high risk and time consuming.
Often, we have seen planning decisions focus less on a matter-of-fact assessment of the merits of a proposal and more on managing local sentiment. This often leads to consents on appeal, where the planning inspectorate overturns a local planning authority’s initial refusal.
This wastes public and private resources, delays the positive economic benefits of a project’s capital expenditure and construction phase, and causes queues for other projects. The understaffing and underfunding of local authorities’ planning teams further exacerbate these delays.
We have specific experience of this – one recent example being a solar farm proposal that could have powered 14,000 homes but was turned down at planning committee stage due to a minor reduction in farmland, despite there being no lower-quality land near the substation.
The cost and delay risks associated with planning have become a financial and deployment risk, and ultimately, a deterrent for investors. It’s therefore encouraging that the bill proposes a national scheme of delegation that will introduce more consistency and certainty into the process.
Through regulations, the government will clearly set out which planning functions should be delegated to planning officers for a decision and which should instead go to a planning committee or sub-committee. While we keenly anticipate further details on precisely what this will look like, we are encouraged that this will improve on the status quo while maintaining local democratic accountability.
Tackling the problem of under-resourcing, the bill enables planning committees to set their own planning fees (up to the level of cost recovery for a planning application). We are, of course, cautiously optimistic that this will allow commit- tees to hire more staff and process their caseload more efficiently.
However, we would caution local authorities against pushing materially more cost onto applicants, as this would only slow applications and economic growth further. Elsewhere, the bill introduces an important new duty for statutory consultees and local authorities to consider guidance from the secretary of state on engaging with nationally significant infrastructure projects (NSIPs).
Currently, some consultees act as barriers to projects because they do not have an incentive to align with the government’s growth agenda. This new duty should promote alignment with national priorities.
As the bill works its way through parliament, there are other areas we recommend for consideration. For example, the bill rightly streamlines the appeal process for NSIPs by reducing the number of opportunities for legal challenge.
This is an important step but potentially overlooks the benefits of broader reforms to the appeal system, looking beyond purely NSIPs. A well-funded and expedient appeal system would enable major growth projects to advance faster, give investors certainty, and keep planning authorities honest, by discouraging them from rejecting applications that are likely to be approved quickly by the inspectorate.
For us, as for other investors, the barriers we have faced when investing in the UK have been deeply frustrating.
We therefore welcome the government’s ambition to knock them down and allow us to get on with building the essential infrastructure the country needs to grow the economy – while, at the same time, improving the lives and livelihoods of scheme members and UK residents.
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