What is Labour’s plan for planning? What we know and what the new government might consider

The country has voted and a new Prime Minister has taken office in Downing Street. Deputy Prime Minister Angela Rayner has promised to unveil the government’s new housebuilding programme in the coming days, and at least three housing announcements are expected in the next 14 days. It’s time for Labour’s urban plan to be implemented, but what can we expect first?

1. Making a statement, particularly written ministerial statements (WMS)
   Labor is likely to brief developers on its proposed changes to the planning regime within its first 100 days. Many of Labor’s planning commitments will require legislative changes, which will take time due to the consultation process.

   WMSs provide a rapid means of communicating departmental policy and procedural initiatives and can help bridge any interim period before the National Planning Policy Framework (NPPF) and legislative changes come into force. Changes made through WMSs or Planning Practice Guidance (PPGs) do not require consultation and are therefore rapid mechanisms for changing planning policy.

2. Expect ‘immediate’ updates from NPPF
   Sir Keir Starmer in an article for Interior housing (26 June 2024) wrote that “a Labour government would immediately update the National Policy Planning Framework”. We understand that a draft NPPF is expected to be published before the end of the month.

   While it is true that it is easier to change policy than legislation, it would take between six and twelve months for changes to the NPPF to come into force due to the consultation requirement. Therefore, any update to the NPPF will not immediately change the existing policy position.

   We expect the changes to the NPPF to focus on strengthening the presumption in favour of sustainable development, in addition to reversing the changes to the NPPF in December 2023, as promised. We can therefore expect mandatory housing targets for individual local planning authorities to return in six months to a year.

3. Identify the gray belt from the green belt
   Labour has promised a strategic approach to green belt areas so that so-called ‘grey’ areas (e.g. disused car parks) are freed up for development. Angela Raynor has said she will be writing to local planning authorities asking them to review their green belt areas to identify potential grey areas. We expect this to happen in the next three weeks.

   The manifesto mentions that development in grey belt areas will be governed by golden rules, although there is no explanation as to what they will be. The golden rules can be expected to be announced at some point in the next 100 days. These rules will be essential for developers and local communities to ensure they strike the right balance between allowing development and allowing local communities to shape housing development in their area, another Labour Party commitment. However, if local planning authorities decide not to develop on newly designated grey belt land, the government could step in, despite the wishes of the local community. Labour has consistently promised a tougher approach to so-called ‘nimby’ councils.

4. 300 new planning officers during the legislature
   One of Labour’s manifesto commitments is that the 300 new planning officers will be funded by £20m of revenue raised by a 1% increase in stamp duty on purchases of non-residential property by non-UK residents.

   This equates to less than one new officer per council area, which is likely to plug existing gaps rather than bolster existing resources. We do not anticipate any significant increase in the number of case officers in the near future to help cope with the high workloads currently facing many local planning authorities. Labour will likely need to consider changes to stamp duty before it can fund its new hires.

What other measures could Labour consider?

1. Support for construction on small sites
   It is becoming increasingly difficult for small sites of less than 250 homes to obtain planning permission. A recent report prepared by Savills on behalf of the Land, Planning and Developers Federation and Richborough (a strategic land development company) found that there had been a 42% drop in the number of small sites granted planning permission in 2023 compared to 2017.

   It is clear that if Labour is to meet its target of building 1.5 million homes over the next five years, it will need to promote development on small sites rather than just in large ‘new towns’. Supporting SME developers and builders would also help break the dominance of large housebuilders in the sector.

   This could be achieved through financial support initiatives for SME developers and builders, as well as changes to the NPPF so that sites up to one hectare in size do not need to meet at least 10% of local planning authorities’ housing needs.

2. Use existing mechanisms to encourage the creation of spaces
   As outlined in the Placemaking Two report by Farrer & Co and ADAM Architecture, current planning and taxation regimes do not encourage or support land-based and stewardship-driven development.

   The Government could consider using existing mechanisms at its disposal without legislative or policy change to encourage land use planning and patient development. For example, local planning orders or public-private joint ventures (subject to compliance with public procurement rules) help to reduce the risks associated with the planning process for investors and developers while ensuring that necessary infrastructure is delivered thoughtfully and efficiently.

3. Rewarding good practices
   It can sometimes seem as though developers are public enemy number one (or two after bankers). Indeed, many recent legislative changes have been accompanied by rhetoric that we need to crack down on developers or local planning authorities that are not performing. Labour has indicated that it will take tough action against local planning authorities that do not have up-to-date local plans. While sanctions for poor performance are certainly one option available to encourage minimum performance targets, the government might consider how to encourage ‘good’ performance.

   To define “good” performance, aspects such as community engagement and other land-use initiatives could be incorporated into any performance criteria. This could not only encourage public benefits that would not otherwise be achieved, but it would also help change the narrative around actors in the sector, whether public or private entities.

We await further details of Labour’s town planning plan, which aims to “deliver the biggest boost to social and affordable housing in a generation” and “reform” our planning system. It remains to be seen whether Labour can actually revive construction in Britain, but only time will tell.

This publication is a general summary of the law. It is not a substitute for legal advice tailored to your particular situation.

© Farrer & Co LLP, July 2024