Competitiveness is once again at the top of the political agenda. This time the discussion is going beyond questionable assertions about a 'strong' pound or the implied suggestion that, rather than a single European currency, England needs different monetary policies for the North- east and the South-east. Nor is it particularly about alleged inefficiency in the process of construction. This time a major concern is the anti- competitive impact of our planning system.
McKinsey's study of productivity1 concludes that the uk could increase its economic growth rate by 1.5 per cent per annum if it relaxed planning regulations and made it easier for companies to adopt world-class business practices. Although the report was not commissioned by the government, the Treasury and the dti have liaised with the consultants, and a dti white paper on competitiveness is imminent. The report calls for a stronger competition regime, based on a clear objective of economic efficiency and identifies a uk 'total factor productivity' gap (reflecting capital and labour productivity and the efficiency with which both are used) 26 per cent lower than in the us and 14 per cent lower than in West Germany.
It identifies the main causes as being:
tight planning regulations that prevent businesses such as food retailers expanding
regulations and agreements affecting specific product markets, such as building controls on hotels.
Are planning and building controls really so pernicious? Some experience of planning controls in Europe and the us suggests that they are capable of imposing familiar levels of constraint. In both Florida and Spain it is not unusual for four tiers of approval to be required for a one-off house. Similarly, the lack of controls evidently imposed on the building of 'strips' on the edge of towns is the same in the us and France. Tacky sheds, a cheap extravaganza of signage and parking lots make the drive into many towns in these countries a depressing experience.
In between, the us in particular has evolved a controlled but permissive regime for areas such as industrial estates where compliance with a published set of planning and building codes is all that is required. For investors there is generally no uncertainty or delay, and no need to worry about planning committees.
If McKinsey is right, the government's 'modernising planning' strategy should have the factors impeding economic growth in its sights. It is not yet apparent that it does. The maturity of the system makes elaborating and fine-tuning its controls, procedures and policies easy, but un-elaborating them difficult. Rather like trying to trim a building budget, an extra item is always cheaper than the saving achieved for the same thing!
The reality is that the us strip is a consequence of the vast amount of land available and its consequent low value, and France has twice the land for size of population that we enjoy on this crowded island. There is a rationale for higher standards of stewardship for what precious little land we have. (Unless you take the view that, as members of the eu, we should fill up our green bits and go over there to enjoy open spaces.)
Even so, our system is skewed towards over-protection and lacks confidence when dealing with change. There is scope for 'zoning' development areas in such a way that a series of clear 'deemed to satisfy' rules apply and may be implemented without any reference back to a planning authority. The greatest opportunity for this approach may be in urban regeneration and may be implied by the findings of Richard Rogers' taskforce.
Let's go for a merging of use classes (residential and B1 for starters) to facilitate mixed-use development, and to permit changes in the balance of use through the life of a building. We still await the promised harmonisation of building regulations with planning controls. With the benefits of mixed- use increasingly being recognised by developers as well as planners, these harmonised rules are long overdue.
Size shouldn't matter
Symptomatic of the skew in the system I refer to above is the detr's consultation paper on the planning powers of London's new mayor2. No recipe for imaginative, pro-active interventions this - rather a schedule of reasons to interfere with planning applications on the pretext that they have 'strategic' implications. The list includes buildings over 20m high fronting the Thames, 50m in the City, 30m elsewhere; buildings exceeding 20,000m2 in central London, 10,000m2 elsewhere and sites over four hectares or 200 units.
Is size, of itself, strategic? Planning policy should be less crude. The City Corporation, prompted by just the sort of large employers and investors who will take on board the thinking of the McKinsey report and be tempted abroad, has strongly rebuffed the detr proposals, saying that the floor area of a proposal is irrelevant to its strategic value, height should not be a consideration unless it exceeds 150m and, in any case, a third tier of planning control is undesirable. If the mayor considers a project to have a strategic dimension (sorry!) he should refer it to the Secretary of State who in any case is to retain his powers of call- in. This will leave the mayor free to establish simplified regeneration zones, promote new bridges and bring the Olympics to London, thus adding to rather than reducing our national competitiveness.
1 'Driving Productivity and Growth in the uk Economy', McKinsey Global Institute, free, tel: 0171 873 6796
2 'Planning Applications of Strategic Importance - categories of development on which the proposed mayor of London is to be consulted.' Consultation paper from the Government Office for London.
Brian Waters is principal of the Boisot Waters Cohen Partnership, tel: 0171 828 6555