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To attract investors, cities need to speed up their planning processes

A responsive planning system is a crucial factor for investors and developers when deciding which cities to invest in

Blog post published on 17 August 2017 by Adeline Bailly

Private sector investment is essential for boosting economic growth in our cities, but it’s not always clear what cities should be doing to attract this investment. However, one key issue highlighted in our recent report What investors want: a guide for cities is the importance developers and investors place in a city having a responsive planning system when deciding where to invest.

Delays introduce risks and costs, challenging the viability and profitability of investments. A reputation for slow, restrictive planning deters investors, and will undermine other attempts made by a city to demonstrate a pro-investment attitude, which has to be reflected in day-to-day decisions to be convincing.

A city’s tendency to approve planning requests also matters. A high proportion of development application approvals indicate the city is pro-growth and suggests new investment proposals are likely to be supported, an encouraging sign for investors.

How well do UK cities’ planning processes perform?

Data on how cities across the UK perform when it comes to speed of planning process is publicly available from the Department for Communities and Local Government – and is used by investors to gauge the ease of working with places on particular projects.

This data looks at how cities perform against the target set by the Government for local authorities of making 60 per cent of planning application decisions for major developments within 13 weeks (or the otherwise agreed time). But given that all local authorities met this target in 2016, cities need to achieve higher rates of responsiveness to differentiate themselves from the competition and stand out as pro-investment.

Figure 1: Share of planning decisions made within 13 weeks, or the agreed time, and the share of applications approved, 2016

Some cities perform well above the national target, as shown in Figure 1. In Blackburn, Coventry, Brighton and Ipswich 100 per cent of planning decisions were made within the 13 week period. Other highly responsive cities were Wigan and Derby, each with 97 per cent of decisions made on time. In comparison Hull and Birkenhead only met the time limit for 61 and 60 per cent, respectively, of decisions, and Exeter and Basildon were also below 70 per cent.

How can cities speed up their planning processes?

In the report we explore how Coventry and Blackburn achieve this high-level of responsiveness. Blackburn’s Growth Team, for example, offers a premium planning service to developers for an extra charge, with faster responses and support from a senior planner. To improve planning more generally, they also re-designed this process to ensure cases are only brought to planning committee when absolutely necessary.

Coventry, meanwhile, were previously ranked 288^th of over 300 councils for planning response speed just a few years ago, but made a concerted push to improve the process. To do so, they promised developers and investors that every planning application would be processed in under 13 weeks – in effect, forcing themselves to deliver, and resulting in the council making 100 per cent of its planning decisions within the set period of time. In both cases these strategies have reduced investors’ risks and costs, improving the city’s attractiveness to them.

There is also variation in rates of approval amongst cities, but these statistics are harder to interpret. If a city approves most of its planning applications this could be due to a pro-investment attitude and efficient processes. Alternatively, the city may have received a small number of applications and so was able to approve a higher share of them.

The key message from investors is that every city can take steps to make their places more appealing. Improving planning processes is one of the best ways to do so, but there are many more to consider. Cities should aim both to provide excellent fundamentals – such as economic growth and supportive leadership – and to make investors familiar with what the city offers by making efforts to publicise their selling points. Even with the best opportunities, a city will not attract investors if they are unaware of them. Establishing personal connections with the industry, and building a positive reputation amongst investors is crucial.

Read more in our report about the step cities can take to ensure they are as attractive and open to investment as possible.