This research has been informed through discussions with Indurent, Mulberry Commercial Developments, GLP, SEGRO and Tritax Symmetry Ltd.
Iceni supports the BPF Logistics Manifesto (2024), the themes of which cut across many of the key issues raised in our report.
With the new Labour Government now in place for just a few months and the National Planning Policy Framework consultation well underway, this latest instalment of Iceni’s annual insight into the industrial and logistics sector, focusses on what we see as the key priorities for Government to consider in order for the sector to continue to thrive into the future.
The industrial sector remains an unsung hero of Britain’s economy, quietly driving forward local economic growth. The NPPF consultation and anticipated industrial strategy show that the Government recognises it needs to support growth in the sector, but more is needed.
This report combines Iceni’s experience with insight from key clients including marketleading developers, occupiers and local planning authorities, to identify five key recommendations for the Government to consider when progressing planning reforms. These recommendations are:
The need for greater investment in infrastructure underpins these recommendations. For more information, please contact:
Matthew Kinghan, Director, Economics
T: 07753 222 920 E: mkinghan@iceniprojects.com
Stuart Mills, Associate Director, Strategic Planning
T: 07771 394 497 E: smills@iceniprojects.com
James Bompas, Director, Business Development
T: 07736 314 143 E: jbompas@iceniprojects.com
The proposed NPPF approach to strategic planning is welcomed. The proposed reforms to the National Planning Policy Framework (NPPF)1. identify the objective of a more strategic approach to planning. This is supported by strengthening cross-boundary collaboration ahead of legislation to introduce mandatory mechanisms for strategic planning - introducing universal coverage of strategic planning within this Government.
At present, many large-scale investment requirements simply fall between the cracks as individual authorities develop their local evidence and plans.
Strategic planning should be brought forward, mandated and extended to all local authorities at the earliest opportunity. Importantly this includes a transparent approach to collecting joint evidence on local housing and economic needs to deal with strategic economic investment opportunities and ensure a holistic - rather than piecemeal - approach to planning. This should include the need to identify strategic logistics functions and opportunities for industrial growth and inward investment.
The West Midlands Strategic Employment Sites Study 2023/24 was published in September 2024, co-authored by Iceni Projects. The Study exemplifies the approach to identifying both the quantum of strategic investment and potential locations for growth and represents a positive, more holistic approach to planning.
The Planning Practice Guidance (PPG) remains insufficiently clear in the interpretation of evidence regarding industrial and logistics. The divergence in different interpretations of evidence currently causes considerable issues in Plan making.
This is particularly concerning given the PPG recommendations on employment forecasts (Paragraph: 030 Reference ID: 2a-03020190220), because there is an increasing divide between employment forecasts and business premises needs - which forecasters themselves recognise. Some forecaster outlooks signal slow growth in logistic or contracting employment in manufacturing, which is a stark contrast with industrial occupier demand. This then masks the need to deliver new high-quality premises to support economic growth and productivity.
Greater weight should be placed on market signals in the PPG to improve conformity across assessments and avoid the pitfalls of underprovision. In addition, the Government needs to work with local authorities to shift their focus from local need to recognising both local and strategic occupier requirements in their assessments, considering this in partnership with neighbouring authorities where necessary.
The submitted Warrington Local Plan sought to allocate a large-scale Green Belt employment site in the south of the Borough, a strategy supported by council officers and members and of course its evidence. However, the Inspectors for the Plan took a different approach to interpreting the PPG; recommending the removal of this strategic site2. Ultimately, the Plan was adopted in December 2023 without the site and its associated local economic investment. approach to planning.
A 5-year land supply needs to be maintained for industrial and logistics developments (and wider employment floorspace requirements), to ensure that throughout the Local Plan period, land is available to continue to support economic growth.
Current national housing policy sets out a clear expectation that local planning authorities should identify their housing requirements and plan to meet these using a range of mechanisms, such as the 5-year housing land supply and Housing Delivery Test measurements. This should allow other sites to come forward to meet needs if delivery drops below the requirement.
In contrast, current national policy dictates that significant weight should be given to its supporting economic growth in order encourage sustainable growth to meet identified needs. The policy is significantly more vague than that of housing, and there is no specific requirement to maintain a deliverable supply of employment sites, or any guidance as to what happens if delivery falls below expected rates. There is a lack of clarity for decision-makers in such circumstances and all of this contributes to the perception that this type of development is considered less of a priority than housing.
Introducing a similar requirement for employment needs to that for meeting housing requirements, would allow authorities to identify and maintain a consistent supply of land. This would provide more certainty for local authorities and ensure appropriate measures are in place to boost the supply of land in the event of any drop in delivery.
The proposed NPPF reforms place a welcome greater emphasis on identifying sites to meet the needs of the changing economy, including locations for freight and logistics. However, there is scope for the national policy to go further by requiring specific and measurable targets for different employment uses, including industrial and logistics uses specifically.
All local authorities should be obliged to develop and maintain a schedule providing transparent assumptions regarding land availability that can be tested through examination and kept up to date.
Blackburn with Darwen recently adopted their Local Plan, and their Employment Topic Paper (2022) provides a trajectory of the associated commitments and delivery dates, leading to an evidenced cumulative delivery plan across the Plan period.
Blackburn and Derwent Local Plan (see appendix A-C)
The proposed reforms to the NPPF include a set of ‘golden rules’ to ensure land released from the Green Belt for major development delivers in the public interest. Paragraph 155 is specific in terms of expectations around residential development linked to the delivery of affordable housing.
The reference to necessary improvements to local or national infrastructure in the draft NPPF is clearly relevant to employment, and particularly industrial and logistics schemes, and the provision of new or improved publicly accessible green spaces could also apply to larger employment schemes. However, a wider opportunity could be identifying community benefits specifically associated with the nature of the development, to provide additional incentives for local authorities and communities to support Green Belt release which meets employment needs.
Subject to viability, golden rules specifically relevant to industrial and logistics development could include the agreement of a bespoke local employment and skills package or maximising opportunities for sustainably sourced power.
A range of studies have highlighted gaps in understanding about the economic benefits and operational requirements of the logistics sector. Our discussions underscore the lack of sufficient weight often given to the importance of the sector in the decision-making process. Whilst the profile of the sector has increased in recent years alongside the boom in demand, this has not necessarily translated into a widespread understanding in terms its economic role or benefits amongst decision-makers or communities.
There is a particular need to enhance understanding around the sector’s central role in the economy, the economic benefits of construction and operational processes, locational requirements, and sector-specific institutional standards that influence the design approach to developments.
Key sector leaders we spoke to noted issues such as:
The nature and type of jobs created on industrial and logistics premises being frequently misunderstood and under-estimated, leading to the social and economic benefits of proposals not being given the appropriate weight in decision making. The sector delivers a wide range of roles including specialised technical workers supporting highly productive and advanced automation robotics.
A frequent disconnect between the design expectations of decision-makers and the operational requirements for an industrial or
warehouse space, for example in relation to building heights.
The importance of flexibility for operators in the operation of the site, which may not always be recognised in planning policies.
The standard construction employment and skills plans used by local authorities are not flexible or tailored to suit rapid build times.
In response, we are calling on the Government to facilitate greater dialogue and partnership between decision-makers and industry, and to provide the appropriate tools for decision-makers to develop their knowledge of the sector, for example establishing forums to forge new relationships and providing the necessary funds or resourcing to train both officers and elected members.
Two critical components for industrial investment are power and transport, with labour making up the third.
There is an ever-growing demand for power to support modern processes, and this is a major challenge to the delivery of industrial development which could compromise economic growth targets if not addressed.
Lead-in times to secure connections and the necessary power for developments is becoming increasingly protracted, stifling opportunities for delivery. With proposals for highly sustainable power-generating facilities struggling in terms of network capacity, upgrades and expansion of the grid should be a number one priority.
Similarly, investment in highways infrastructure and the strategic road network is critical to the success of the industrial and logistics sector. In many areas, under-investment remains a block or threat to economic growth, for example in the Midlands where strategic development around the A5 and M1 (J20) is effectively red flagged by National Highways.
We are at a crossroads with the new Government, offering a unique moment of opportunity for Labour to drive economic growth in a sector that is ‘ready to go’.
Focussing on delivery in the short-term will fast track economic growth, and secure some of the quickwins the Government needs to demonstrate they are serious about delivering on their commitments.
In the longer-term, the industrial sector cannot be seen as coming in second place to housing, or detracted from with the potential of shiny new laboratories and gigafactories.
The industrial and logistics sector is at the heart of our changing economy, and has been perfectly placed to take advantage of changing lifestyles over recent years. By bringing together developers, local authorities and the Government, we can work together collectively to ensure the sector continues to play a major role in securing the UK’s future growth and in underpinning our country’s new industrial strategy.
Birmingham: The Colmore Building, 20 Colmore Circus Queensway, Birmingham B4 6AT
Edinburgh: 14-18 Hill Street, Edinburgh, EH2 3JZ
Glasgow: 201 West George Street, Glasgow, G2 2LW
London: Da Vinci House, 44 Saffron Hill, London, EC1N 8FH
Manchester: This Is The Space, 68 Quay Street, Manchester, M3 3EJ
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