In retail, time is money. Once a retailer has settled on a location, the sooner it can start trading the better. And for developers, it does not pay to have a site sitting empty for months or even years while the plans are painstakingly dissected.
Thousands of planning applications with implications for retailers are submitted every week. From the smallest project, such as a shop front alteration, to a huge shopping centre scheme, each is subject to rigorous scrutiny before it can be given the nod. And because a new store programme is such a vital part of a retailer’s forward planning, it is with a certain reluctance that they place themselves in the hands of the planners.
Furthermore, many lack faith that the proposals will be treated with the same efficiency that has gone into drawing them up. Both retailers and landlords are crying out for changes to be made to the planning system, and according to experts, many of the most effective changes would be simple to introduce. So what are the flaws in the system and what can be done to improve it?
“Everyone deserves a better service from the planning process,” says Asda head of property, communication and planning Jonathan Refoy. “Whether you’re looking to make a small extension to a shop or building a supermarket, if it can be speeded up, it’s better for the UK economy.”
Even when times aren’t as tough as they are proving at the moment, no retailer wants to lose out on vital trading weeks. Top retailers run a tight ship and to miss out on sales because of delays that are out of their hands can be critical. So a scheme being held up because the resources from the local authority aren’t there to see an application through speedily is enough to have many retailers tearing their hair out.
It is a particular issue for supermarkets, which tend to own and develop their own stores, so it is crucial that new stores go up as quickly as possible.
Problems in the planning system boil down to two key issues: delays and high costs. Retailers and landlords both find these a huge issue and, according to experts, they are areas that could and should be improved.
Property consultancy GL Hearn advises retailers and developers on how to approach the planning process and has worked with many of the biggest grocers. Partner Nick Spall says: “Everyone wants clarity and speed and as low costs as is reasonable. At the moment, the system is slow and increasingly expensive, which is putting people off putting in applications.”
For the biggest projects, such as a retail-led urban regeneration scheme, a developer can be looking at up to 10 years from conception to completion and half of this might be spent on the planning.
A lengthy process
Last month, Land Securities and Hammerson opened their Cabot Circus scheme in Bristol. But a decade has passed since the scheme was dreamed up and it was more than eight years ago that the developers first sat down with Bristol City Council. After five years of planning and consultation, the first demolition works began on the site in September 2005 and the construction was complete within three years.
The two years that it took the Bristol Alliance – the partnership between Land Securities and Hammerson – to prepare an application and the three years to wait for its approval is typical of the timescales developers work to. Of course there is a huge amount to prepare and go through, but many argue that far too much time is spent unnecessarily on planning.
One of the spanners in the works is the huge amount of paperwork a retailer or developer has to prepare just to submit an application. The level of paperwork has burgeoned in the past two decades and many developers feel that the sheer quantity and detail of the paperwork they have to put together is clogging up the whole system.
These days, a complete application needs to cover every conceivable base, including detailed ecology reports from the local area and traffic impact studies to name just two. The amount of time, effort and money a developer has to spend to get this information is no laughing matter. “It’s an increasingly extensive package of submission for an application,” says Spall. “It’s a huge list of planning submission requirements. There’s more and more information to come up with and it’s slowing things down.”
And the longer it takes to prepare a package, the more costly it becomes. With developers already facing the squeeze financially and the future of many developments now looking less certain, increasing costs at the planning stage is the last thing they need.
And if these costs are, as Spall says, putting people off making applications, many retailers – especially those that anchor shopping centres – are also affected. An anchor retailer such as Debenhams, which has expansion plans in place, is in the hands of the developers as to when its new stores can open.
As reported in Retail Week (August 22), Debenhams has been hit with a catalogue of delays in its stores pipeline, because of circumstances outside its control. While some have been affected by the credit crunch, planning has been a factor at others. At the time, of the 17 schemes it was due to anchor, about half of them had question marks over their opening dates. As the retailer pointed out, these things happen – but retailers like to be in control and any delays to a store roll-out programme are unwelcome.
The cause of the problem is simple: money. At the root of the difficulties that local authorities have in approaching planning is a lack of resources. This leads to insufficient manpower to deal with the thousands of applications that are submitted every year, so the time that should be devoted to the huge and complicated projects isn’t.
“The biggest [shortfall] is in terms of the resources that local authorities are able to put into major planning applications,” explains Refoy. “If that one area could be solved and they could be properly resourced – particularly in rural areas – that could be the biggest fundamental change in quickening up the process.”
And this is becoming more of a problem because the application process is becoming more demanding and complicated, says British Property Federation (BPF) senior policy officer Jonathan Seager. He explains: “The sites are often complex and problematic. A local authority with a massive deficit of resources can’t devote enough to go into the complexities of the issue. They don’t have the capacity to deal with some applications and it’s a huge problem.”
For the retailers and landlords putting in the applications, there is a lot of frustration at the lengths they have to go to just to get a submission in. Many criticise local authorities for being overly rigorous in the demands they place on a developer before an application is put in and this adds to the delays and high costs they incur.
Spall explains that one reason for this is the grant incentives that councils receive for processing an application quickly. While this might sound like a sensible idea, he says that the result is that planners make sure every “i” is dotted and every “t” crossed before they register an application so that it can be processed as speedily as possible.
“Planning officers might recognise that they don’t need certain reports, but will ask for them anyway to be on the safe side,” he explains. “The classic case is that an application goes in and it just sits there in post-submission but pre-registration. They won’t register it until they are satisfied it is all complete and this can take weeks or longer.”
THE 12-POINT PLAN
At the forefront of the body that is pushing for changes to be brought in is Sainsbury’s head of planning Sue Wilcox, who is chair of the BPF planning committee. In her role as the latter, she has been heavily involved in putting together a manifesto that outlines ways the Government could and should be reforming the system.
Subsequently, the BPF has laid out 12 points identifying exactly where the Government could be doing more for the system [see box]. The thrust of the BPF’s recommendations is for the Government to increase funding to local authorities, which in turn need to use these resources to promote better recruitment and training at all levels of the planning system. With enough support and judicious spending, the BPF and retailers feel that local authorities will end up with a more comprehensive, efficient system that could save everyone time and money.
While the effects of this will clearly take a while to be felt in practice, Wilcox says there is also plenty to be done immediately.
“There are a number of short-term measures that local authorities could use, such as employing external agencies which would speed up the process until more funding is received,” she says.
Retail property has changed; the strength of the new generation of schemes that is emerging is that they transcend the traditional idea of a big box filled with stores. The new school of thought is for mixed-use, uncovered schemes that play more of a role in regenerating their host cities.
But the upshot is that planning these projects is far more complicated, while the system, and more importantly the way it’s funded, hasn’t kept up. If retail property is to keep up the pace that has made it so strong, the Government needs to do more to oil the planning machine that drives it.
The bPF’s 12-point planning manifesto
1 Improve recruitment and retention
2 Let planners get on with planning
3 Outsource mainstream planning functions
4 Accept property industry funding for planning resources
5 Make councillor training mandatory
6 Pool resources
7 Incentivise local authorities to promote development
8 Use tax increment financing to fund infrastructure
9 Reduce the information required to support planning applications
10 Speed up the contribution from statutory consultees
11 Improve and incentivise pre-application discussions
12 Planning appeals should concentrate on the reasons for refusal
Source: BPF Planning Manifesto – Making Planning Work. September 2008