795: Planning Act 2008 expected impact 10 years ago

Today’s entry looks back at the expected impact of the Planning Act 2008 10 years ago.

As there is a lull in news, here is a first look at what was going on ten years ago, when the Planning Bill was wending its way through Parliament, to become the Planning Act 2008 that we know and love in November of that year. Accompanying the bill was an ‘impact assessment’, and it is interesting to revisit it to see how things have turned out compared with the predictions. The impact assessment can be found here.

National Policy Statements

By 2009 there were expected to be six full National Policy Statements (NPSs) and three ‘review-type’ NPSs. The latter was something originally in prospect where existing statements of policy were to be tweaked and rebadged as NPSs, rather than being drafted from scratch, but this never happened, they were all done from scratch.

The six full statements were five energy ones and one for national networks (road and rail), and the three review-type ones were aviation, ports and waste.

In the event there were six energy NPSs (the one not mentioned being nuclear, which is odd since arguably that was one of the drivers for the Act in the first place) but these were not designated until July 2011, and the national networks NPS didn’t get designated until January 2015.

Aviation, as we all know, is still in progress, ports was designated in January 2012 and waste in June 2013.

Two more were planned for 2010, waste water and water supply. The former was designated in February 2012 and the water supply one will probably get designated next year. A thirteenth NPS is also in prospect, on the geological disposal of radioactive waste.

All proposed NPSs therefore took considerably longer than planned, being between two and nine years late. The impact assessment assumed that reviews would take place five years after first designation and every five years thereafter, but the only one being reviewed currently is the nuclear power one.

Nationally Significant Infrastructure Projects

The number of Development Consent Order applications expected to come forwards was similarly optimistic. There were expected to be an average of 46 applications a year between 2008 and 2030, broken down as follows:

• gas and coal 0.9 per year;
• onshore wind 6.8 per year;
• offshore wind 4.2 per year;
• biomass 1.4 per year;
• wave energy 0.2 per year;
• tidal energy 0.3 per year;
• hydroelectric 0.9 per year;
• gas storage 2 per year;
• gas distribution 2 per year;
• water supply 0.1 per year;
• waste water 0.1 per year;
• waste 0.1 per year;
• airports 0.1 per year;
• harbours 1 per year;
• ‘Transport and Works Act’ (does that mean railways?) 1 per year; and
• ‘Highways Act’ (presumably roads) 25 per year.

Power lines, rail freight facilities and non-gas pipelines are not mentioned. Odd that tidal energy is mentioned and yet the corresponding NPS did not cover it. Some thresholds have gone up and down, and onshore wind has been removed altogether, which has obviously affected numbers.

To compare actual with predicted, let’s be generous and start the clock running on 1 March 2010, when the regime was switched on, rather than November 2008, when it was given royal assent, so it has been going for eight years. The actual figures have been 12 a year in total, breaking down to:

• gas and coal (in fact only gas) 17 in 8 years ie 2.1 per year – above par;
• onshore wind 0.25 per year – below par;
• offshore wind 2.1 per year– below par;
• biomass 0.25 per year – below par;
• wave energy none – below par;
• tidal energy 0.125 per year – below par;
• hydroelectric none – below par;
• gas storage 0.25 per year – below par;
• gas distribution 0.375 per year– below par;
• water supply none – below par;
• waste water 0.125 per year – above par;
• waste 0.25 per year – above par;
• airports 0.125 per year – above par;
• harbours 0.375 per year – below par;
• railways 0.5 per year – below par;
• roads 1.75 per year – below par;
• power lines 1 per year – above par;
• rail freight 0.25 per year – above par; and
• other pipelines (CO2) 0.125 per year – above par.

Thus only gas-fired power stations, airports, waste and waste water projects have been more than predicted, not counting the three categories that were omitted.

Timings and costs

The optimism continues into timings. Remembering that the original regime did not have separate recommendation and decision stages, but the Infrastructure Planning Commission just took three months to take decisions, the document estimates the following three stages:

• pre-examination 13.5 weeks;
• examination 9 weeks; and
• decision 12.5 weeks:
• total 35 weeks.

In fact the average has been:

• pre-examination 21 weeks;
• examination 25 weeks; and
• recommendation and decision 27 weeks:
• total 73 weeks.

I’m not quite sure where the wildly optimistic nine-week examination figure came from, but in a later breakdown highways projects are expected to take an average of three months from application to end of examination but an airport is longest at nine months. In practice the shortest DCO from application to end of examination has been just under eight months and the average has been 10 1/2 months.

The document goes on to estimate the costs to promoters of promoting a project, and these vary widely depending on the type of project. The cost up to application is estimated to remain the same before and after the introduction of the regime, but the post-application cost was expected to fall, and it is assumed that no costs are incurred during reporting and decision-making (which is increasingly not the case).

An airport DCO is estimated to cost £84.4m, with gas storage a distant second at £8.8m. The lowest cost is a highway DCO at only £500,000. That’s not including application fees, which are estimated to meet the IPC’s annual running cost of £9.3m, so for 46 applications that works out at £200,000 each, actually not too far off until the recent 50% hike. I can’t say how accurate these figures are, but I suspect they are generally higher in reality (not due to legal fees obvs).

Conclusion

The impact assessment accompanying the Planning Bill significantly underestimated the time it would take to get NPSs in place (by about a factor of five), overestimated how many applications there would be (by a factor of four) and underestimated the time each one would take (by a factor of two). I have no idea if that is typical of impact assessments compared with reality, but it’s pretty wide of the mark. The regime carries on regardless.