967: Could infrastructure investment zones help keep the lights on?

Today’s entry provides some musings on investment zones, and a legal challenge to offshore wind projects.

The twilight zone

The Growth Plan sets out proposals for ‘investment zones’ which have lower taxes (including 100% relief from business rates on newly occupied premises), and importantly will have the benefit of ‘planning liberalisation’.

More particularly, the intention for these zones is that ‘planning applications will be minimised and where planning applications remain necessary, they will be radically streamlined.’ Notwithstanding the intention to ‘relax key national and local policy requirements’, the guidance goes onto state that national policy on the Green Belt, protect our heritage, and address flood risk, highway and other public safety matters, along with building regulations, will continue to apply.

Leaving aside that seeming contradiction, it’s clear that the intention here is to encourage housing and ‘drive growth’. Given yesterday’s news about potential blackouts, is there something to be said for having ‘infrastructure zones’? Could, for example, you take a sparsely populated areas and ensure there were ‘automatic’ development rights for clean energy development or could government authorise small modular reactors on decommissioned nuclear sites? Could you bolster permitted development rights for the freeports by creating ‘full fat’ freeports?

How would we go about implementing something I’ve just made up? Good question, made up person! I’ve seen suggestions that local development orders (LDOs) could be used to implement the streamlined planning in investment zones. For context, LDOs can be made by a local planning authority to extend permitted development rights, or grant planning permission, for specific development proposals or classes of development in a particular area.

You could, of course, amend the provisions in the Town and Country Planning Act to allow other bodies (other than an LPA) to propose LDOs, but I’m not sure that is quite the intention of the Growth Plan for a few reasons. First, investment zones (and my made up infrastructure zones) are intended to benefit from the removal of ‘EU requirements which create paperwork and stall development but do not necessarily protect the environment’ but LDOs do not extend to Schedule 1 EIA development. It is also not clear that all existing LDOs authorise development of the kind that fit in the ‘investment zone’ category creating slightly problematic transitional arrangements (would, for example, all LDOs benefit from the proposed environmental streamlining? Will updates to existing LDOs be caught by the previous or current regime).

The most significant issue, though, is that given the overlap with the proposed favourable tax status, and wider government funding, investment zones may be better coordinated at a national level, noting that the government is actively working with fully willing and consenting local authorities. The government may wish to ensure investments zones are consistent (which may not be achievable if local authorities are working in silo). Indeed, inconsistencies which give rise to differential benefits may simply displace economic activity from one area to another, rather than create new growth. Simon Ricketts has two suggestions – the first, a simplified planning zones (SPZ) requires LPAs to take the steps to implement it so has the same issue.

The second suggestion is a ‘planning freedom scheme’ (PFS) which can be introduced by the Secretary of State so doesn’t have the issue that LDOs and SPZs have. That said, a planning freedom scheme is required to ‘facilitate an increase in the amount of housing in the planning area concerned’ so whilst that may be suitable for investment zones, they are unlikely to work for my hypothetical infrastructure zones. Indeed, the Secretary of State cannot make such a scheme unless they consider there is a ‘need for a significant increase in the amount of housing in the planning area concerned’ and the ‘planning freedoms scheme will contribute to such an increase’. It’s worth noting that PFSs are relatively untested as well which, given some of the aforementioned tests, may mean legal challenges going forward.

Rather than a LDO. SPZ or PFS, it could look like a Special Development Order (SDO) – a broad power which resides with the Secretary of State to grant permission for development via secondary legislation. That power is absolute and much broader than the PFS. In the same vein, and unlike PFSs, there is quite a lot of precedent for SDOs. SDOs have been used recently for accommodation for asylum seekers at the Napier Barracks, and border facilities. Though the quintessential example here is the Cardiff Bay Urban Development Area (consented via the Town and Country Planning (Cardiff Bay Urban Development Area) Special Development Order 1989). Wikipedia tells me that development led to 14,000,000 square feet (1,300,000 m2) of non-housing development and 5,780 housing units being built.

Given the aforementioned intention to coordinate tax benefits, ensure consistency in wider approaches to investment zones, go beyond housing to matters relating to infrastructure, SDOs may be better suited. In my hypothetical scenario, there could be permitted development for some clean energy below a particular threshold, and subject to a limited number of ‘prior approvals’ (eg on flood risk, and heritage assets).

Legal challenges

The High Court has refused permission for a challenge to the East Anglia One North and East Anglia Two offshore windfarms to proceed. The claimants argued that there was a deficiency in the examination and planning process because the promoters had apparently ’embarked on what appeared to be a systematic, well-funded and intended-to-be-secret programme aiming to suppress participation of all affected landowners in not just the consideration of CA issues but also examination of the underlying impacts and planning merits of the developments’. Permission to challenge was refused based on the examination processes being sufficiently robust to ensure appropriate information was uncovered and probed.

As we previously reported, the Manston Airport DCO was re-determined positively. That decision is now being challenged by the same person who brought the first legal challenge. We won’t be commenting on that for obvious reasons. (For DCO easter egg hunters, the Manston DCO is the only made DCO I’m aware of that references an SDO – see the definition of ‘Operation Stack’ in that DCO).