Top five things (plus a bonus thing) you need to know about the ‘PIB’
Our Managing Director Tom Lees tells you everything you need to know about the Planning and Infrastructure Bill.
Today - after months of leaks and briefings to the press - the government has introduced their monumental Planning and Infrastructure Bill or ‘PIB’. This is an important Bill for two main reasons.
Firstly, the government has placed many of its growth eggs in the planning reform basket and boy does the country need growth to pay for never ending NHS and welfare bills along with increased defence spending.
Secondly, businesses themselves often flag our sclerotic planning system and mesh of regulations as one of the key issues inhibiting their expansion plans (alongside significant viability, skills, and incentive issues).
The evidence
Most planning decisions are decided by more than 400 local planning authorities (mainly local councils). Over the last 10 years the performance of these planning authorities has significantly worsened. The last complete year (2023-24) shows 20% of major applications are decided within the 13 week statutory target with 38% of applications decided within the eight week statutory limit.
Very large and significant projects go through a different route - the ‘Nationally Significant Infrastructure Project regime’ - which was created by the Planning Act 2008. These projects apply to the Planning Inspectorate for a Development Consent Order (DCO) which gives them everything they need to deliver the project in one go, for example the planning and compulsory purchase of land. In the government’s Plan for Change they made a pledge to try and approve 150 DCOs over this parliament (a 230% increase on historical rates).
Initially the system worked well with schemes securing approvals in 18 months. But since 2012 consenting times have increased by 65 per cent, moving from 2.6 to 4.2 years, and the rate of judicial review has spiked in recent years to 58 per cent from a long term average of ten per cent. This has not only led to generally higher costs per unit (e.g. per kilometre of rail track) compared to other European countries as shown in a recent BCG piece of analysis, but made us much slower at delivery.
These serious delays and inefficiencies are so damaging because they are happening at a time when the UK needs to be building more than ever. The need to build is not just to boost growth - but to accommodate our rapidly increasing population, to allow us to power the country in a clean way, and to take advantage of emerging sectors and technologies.
Take electricity: by 2050, the government expects demand to double. But as of December 2024, the queue of electricity generation and storage projects waiting to connect to the grid was 714 gigawatts (GW) - enough to power London 166 times over - this is a significant problem!
Clearly there is a need to take action to correct the drift, inertia and treacle clogging the arteries of the planning system.
Top five takeaways
1. An end to ‘fish discos’ and ‘bat tunnels’?
While designed with noble intentions the swathes of environmental and habitat regulations (most of which were transferred over from the EU after Brexit) cause significant cost and time delays to projects - sometimes making them so unviable that they cannot be delivered. These environmental mitigations are done on a case by case basis, ‘on location’, and need to be determined before planning can be granted.
To try and address this the PIB sets out plans to create a Nature Restoration Fund. Developers can pay into this fund to address ecological obligations more efficiently, reducing project delays and costs.
2. Death by consultation
In addition to many rounds of public consultation there are also up to 50 ‘statutory consultees’ (generally public bodies) that need to be continually engaged throughout a DCO process. These consultees range from The Coal Board, the local police force to ‘computer says no’ in chief Natural England.
A lack of clarity around consultation requirements and the risk-averse nature of many legal advisers has led to ‘gold-plating’ and disproportionate consultation exercises taking place.
The PIB plans to simplify engagement requirements (by allowing summaries rather than every consultation response), reduce the list of statutory consultees (‘category 3’ persons), encourage digital participation, establishes time limits for certain stages of the consultation process and introduces a duty for consultees to have regard to guidance from the relevant Secretary of State. Hopefully, this will reduce ‘over-consultation’ and repetitive engagement, ensuring that planning discussions remain efficient and proportionate to the scale of projects.
3. A cycle of updates
Nationally important schemes rely on ‘National Policy Statements’ set out the political case and position for categories of project (e.g. roads).
As National Policy Statements have gotten out of date and not been refreshed it has caused muddled thinking about the need for infrastructure and how this relates to more recent legislation e.g. commitments to net zero. This has partly caused an increase in judicial reviews.
The PIB commits the government for a ‘full review and update’ to each policy statement at least every five years which follows on from a recommendation in 2023 from the National Infrastructure Commission.
4. Remove the local politicians (most of the time)
Most planning applications go to local planning authorities. Each of these (normally a local council) has different rules for which decisions can be delegated to council officers (96% of decisions in Q2 2024) and which need to go to a planning committee made up of local councillors. These councillors are not required to undertake any special training.
The PIB will create a national scheme of delegation and make training for councillors mandatory. The government published a Working Paper in February that sets out options for the scheme of delegation, the general thrust is that if applications fit within the Local Plan officers should generally approve them. We suspect that Option 3 within that paper ‘delegation as default with a prescriptive list of exceptions’ will be the preferred approach from government.
5. A boost of energy
Currently schemes are connected to the electricity grid on a ‘first come, first served’ basis. This clearly is mad and has led to speculation by developers and land owners ‘securing’ a place in the queue without any real project or need for connection. The government wants to move to a ‘first ready, first connected’ approach.
The PIB provides the regulator Ofgem with some further powers in advance of the publication of their ‘first ready, first connected’ approach in Spring 2025. This approach will likely prioritise the supply connections set out in Strategic Spatial Energy Plan and we await to see how they define what is ‘ready’.
And a bonus…
6. Limiting judicial reviews (a bad day for Jolyon Maugham KC et al)
In response to the sharp rise in JRs mentioned earlier, the previous government commissioned an independent review by Lord Banner KC. The PIB implements two of his recommendations 1) the removal of the ‘paper permission stage‘ (currently there is a two stage process with one taking place through a written submission and the second at an oral hearing) for judicial reviews of National Policy Statements and DCOs, and 2) removes the right to appeal for cases deemed totally without merit at the oral permission hearing.
So is this Bill worth the hype? Or is the PIB a damp squib? Most people trying to ‘get things built’ will warmly welcome the PIB and the changes it brings about. But it could have been more radical, particularly around habitat regulations, and judicial review.
To see how significant an impact the changes will have we need to wait for further details around delegation to officers and grid connections. Stay tuned!