20 October 2022
One of the first planning interventions of Liz Truss’s government was to introduce Investment Zones. What are they, and how might they impact on efforts to act on the climate emergency?
Incoming governments of all persuasions tend to announce deregulatory changes to the planning system aimed at stimulating economic growth, and Liz Truss’s few weeks as Prime Minister were no exception. The rhetoric states that development, housing delivery and business opportunities are held back by delays and uncertainties in the planning system and relaxing the regulatory framework will speed things up.
The evidence does not support this argument. Any investor or developer wants certainty and is unimpressed by frequent changes to the financial incentives or regulatory framework. Examples include the abandonment, in 2015, of a requirement for all new homes to be zero-carbon by 2016; and the ending of feed-in-tariff incentives for solar panels in 2019, which put the brakes on the burgeoning solar panel installation businesses that had sprung up across the country. Businesses do not like rollercoaster rides, and that is a key risk to delivering climate action.
Are Investment Zones really anything new? Similar initiatives, such as Enterprise Zones, have been around for decades. The 2020 white paper, Planning for the Future, proposed a much broader restructuring of the planning system around three types of zones – ‘growth’, ‘renewal’ and ‘protection’ – but these did not make it into the legislative changes set out in the draft Levelling Up and Regeneration Bill (LURB) in spring 2022. The LURB did, however, provide for a new wave of Development Corporations, which would have planning powers, and Spatial Development Strategies, which could enable local authorities to work together across their boundaries on big strategic issues including carbon reduction and climate change adaptation.
At this stage in the life of the government - currently undergoing another upheaval with the resignation of Liz Truss on 20 October after only 44 days in office - we do not know what will become of the LURB or of wider planning reform (more uncertainty). Investment Zones (IZs) are a less ambitious change to the system, but we should not dismiss the potential risks they pose for climate action.
Mayoral and local authorities have been invited to apply for designation of IZs to accelerate housebuilding and economic development. On the upside, authorities seem unlikely to apply for IZs that are not compatible with their own wider strategic aspirations, including climate action. On the downside, government guidance to applicants appears to make planning relaxations a pre-requisite for designating an IZ. Specifically, it says that IZs will:
“reduce burdensome EU requirements” – this suggests lower environmental expectations;
“reduce lengthy consultation with statutory bodies” – this implies that key consultees such as the Environment Agency and Natural England would have less opportunity to influence development proposals within IZs, but it is unclear how that would fit with their own regulatory duties;
“focus developer contributions on essential infrastructure” – this might be code for funding roads and utilities, but not green space, nature recovery or community infrastructure;
“relax key national and local policy requirements” – this is the real eyebrow-raiser. Key national and local policy requirements are there for good reason: surely, development should either conform with them (for example, design standards) because they are important, or they are unimportant – in which case they should not be required. And, crucially, if development and investment were to shift from outside IZs, where good design is required, to inside IZs, where design standards are relaxed, then the overall quality of design will inevitably deteriorate.
Lower policy standards, relaxed regulatory frameworks, and less opportunity for statutory environmental bodies to influence development could all pose a major risk to the delivery of local and combined authorities’ climate ambitions. Many environmental bodies, including Yorkshire Wildlife Trust, are deeply concerned about this. Oxfordshire County Council has already decided not to apply for an Investment Zone for precisely this reason, stating, “We consider that the de-regularisation of planning controls and reductions in environmental protection, which appear to be a condition of any investment zone, are incompatible with our net zero carbon aspirations and our commitment to protect and enhance biodiversity and environmental quality.”
Many local authorities will want to harness IZs as an economic vehicle, but they will need to mitigate the risk to their climate actions which they have legal duties as well as political commitments to deliver. Creativity and leadership will be crucial here. Public bodies could work across their boundaries to set out shared expectations of what all new development should achieve from a climate perspective, whether or not it is in an Investment Zone, and together ensure that these expectations are not within the scope of the planning relaxations.
They could also make a joint commitment that climate action objectives will be a key purpose of what their IZs will deliver, for example by specifically targeting exemplary housing developments, and the needs of businesses who are working to decarbonise. We are in a climate and ecological emergency; it is only beneficial to accelerate housing and economic development if that brings with it accelerated climate action, so investment needs to be deployed imaginatively.
Andrew Wood is Senior Engagement and Impact Officer for the Yorkshire and Humber Climate Commission
This Commentary was updated on 21 October
Picture: Richard Loader, Unsplash