Retail is contending with a raft of planning policies. How will they play out this year? Christine Eade takes a look at the implications.

The owners of The Centre:MK in Milton Keynes say they are already consulting the public ahead of the new laws over the shopping centre’s development plans

The climate for developers to gain planning consent for shops is at its most benign since the freewheeling days of Margaret Thatcher’s first years as prime minister in the early 1980s. But 30 years later, the difference is that few financial institutions will lend for the creation of new shopping centres and retailers are often demanding less space as online shopping continues to grow.

But if the economy and habits change, developers can expect a less contentious planning process. The reason is threefold. The Localism Act, that became law last year, allows those who live in a neighbourhood to be consulted on whether they need a new shopping centre, while central government’s collective instinct is not to get involved. Secondly, the National Planning Policy Framework (NPPF), published for a four-month consultation period last July, has the development-friendly assertion: “It is important that retail and leisure needs are met in full, and are not compromised by limited sites available.” Thirdly, Planning Policy Statement Four is framed to create “sustainable economic development”.

Finalising the framework

This pro-business, laissez-faire approach should provide an irresistible opportunity for developers to ask for planning consent in the hope that before it expires in five years, tenant demand and funding will have returned. Doing something now would be timely before the NPPF becomes the guiding light for local authorities. For in its present form, it urges local planning authorities to “prefer town centre first where practical”. That seems an easy get-out. CBRE senior planning director Ian Anderson observes: “We immediately see the word ‘prefer’, rather than anything more absolute. Who are the best people to comment on what is ‘practical’? The developers and retailers may prefer to be in places other than the town centre.”

The Communities and Local Government Select Committee also view the word ‘prefer’ as providing a loophole. In a report published on December 21, 2011, it called for a return to existing planning policy: “We recommend that the application of the sequential test for development remains a requirement rather than a preference… And developments that fail the sequential test should be deemed unsustainable.”

Indeed, the Committee undermined the permissive nature of the framework so comprehensively that it seems unlikely to be adopted in its final form by the April deadline. Greg Clark, the decentralisation minister, expressed his gratitude to the committee calling its work “practical and measured”. Anderson predicts that any revision of the NPPF will be addressed and tightened, so that it becomes a requirement rather than a preference.

While the final wording of the framework will be this year’s big talking point, developers and planners will be experiencing the ramifications of the Localism Act that came into force last year. Mark Underwood, director of planning and development at Drivers Jonas Deloitte, points out that even before parts came into force in November, it was influencing central government’s attitude towards development.

“There have been very few appeals since the change of administration, and very few have been called in by the Secretary of State for a decision, because the emphasis is on localism,” he says. Underwood adds that central government is demanding involvement in fewer planning decisions, and instead leaving the onus on local authorities. “We’ve been involved in decisions that would almost certainly have been called in a year ago,” he says. He cites the example of the Brent Cross Cricklewood regeneration, which will create a new town centre on either side of the North Circular, and includes a new high street and a transformation of Brent Cross shopping centre. The Government Office for London decided not to call it in after the London Borough of Barnet had given its consent, six months after the coalition government took power. In the past, such a major scheme would almost certainly have required central government approval. In January, though, doubts over the extent of the revamp emerged, when London mayor Boris Johnson said it will need to be scaled back.

A second example was evident a year ago when Corby Borough Council overruled objections to a 119,156 sq ft Tesco on an industrial site outside the town, saying that a supermarket was the only realistic use for the site. Underwood predicts that the supermarkets will be the first to take advantage of this new benign approach, but adds: “There is little going on in the retail world at the moment, and so there is little to test the policy.”

The hiatus gives both local planning authorities and developers time to get use to a new way of working. According to the framework a local plan should not be “silent, indeterminate or out of date.” This appeals to David Fischel, chief executive of Capital Shopping Centres, which is working up plans to extend some of its centres, particularly those in Nottingham. Fischel says the production for local plans has been an issue. “It’s been easy for local authorities who don’t want something not to produce a local plan, and then to say: ‘It’s not in the local plan.’ They won’t be able to do that after the NPPF is adopted.”

He adds that the shopping centre development industry is in favour of the NPPF. While he doesn’t think it is different from what the industry already has, “it is starker in places with its perception in favour of development”.

Consultation is key

Fischel says Capital Shopping Centres has developed such large schemes that it has always been important to have public consultation, even before the implementation of the Localism Act. And never has local consultation been more important than it is currently in Milton Keynes. Its shopping centre The Centre:MK is undergoing a £30m development, which involves an extension and the relocation of the town’s market. Protest group Xplain says the proposal has “a chilling disregard” both for market traders and Milton Keynes residents.

A spokesman for the The Centre:MK’s two owners Prupim and Hermes insist they are already consulting the public in anticipation of the new laws, just as they did to gain consent to extend the Next store – which in September Milton Keynes council agreed to allow to extend by developing into the car park.

Christmas shoppers were able to see an exhibition within the shopping centre to show both the extension and the relocated market. This month the exhibition is returning, showing how objectors’ concerns have been incorporated into a revised design.

All eyes will be on Milton Keynes to see whether the city is the setting for a victory for localism or the setting for evidence of a liberal planning regime. 

Looking after local needs

Localism Act 2011 Implemented between November 2011 and April 2012

  • Developers must publicise their plans to bring them to the notice of those who live nearby, including the timing of such developments
  • The locals’ opinion on design must be taken into account
  • Neighbourhood forums will create neighbourhood plans
  • If a local authority wants a retailer to open in its area, if can offer a reduction in business rates, so long as the local authority can make up the shortfall out of its own resources

National Planning Policy Framework: Planning for Prosperity Date of implementation: possibly later in 2012

  • The heart of the planning system is the presumption in favour of sustainable development
  • Local plans should be prepared to be flexible to respond to local needs, and be evidence-based
  • Local authorities should define their primary and secondary shopping areas

Planning Policy Statement Four Planning for Sustainable Economic Growth Implemented December 2009

  • When assessing the need for retail and leisure developments, consider the amount and the quality of space that already exists, and take into account the need to increase competition if shops are overtrading
  • Prioritise previously developed land
  • Apply sequential test: town centre first; edge of centre and out of centre if the transport links are good, and will not have an unacceptable impact on the town centre