Plans for the future

Christine Reeves and Gillian Jones from Nathaniel Lichfield and Partners consider the future of retail planning in England and Wales

Consumer spending (or lack of it) and the rise and fall of some of the major companies in this country, mean retail matters frequently make the headlines, as people speculate on whether the latest results mean we are experiencing a consumer boom or that a downturn is the forerunner to a recession.

In planning however, the timescales involved in both developing policy and bringing forward new schemes are long-term, and thus the major concerns now are not the Christmas trading results, but the possible changes to the planning system as a result of the Competition Commission Inquiry into the Grocery Market and the revisions to Planning Policy Guidance (PPS6) in England.

Nathaniel Lichfield and Partners are one of the leading planning consultancies for retail planning. The Town Centres and Retail team of NLP’s Cardiff office are keeping a keen eye these possible changes to see if they will result in increasing divergence between retail planning in England and Wales.

English retail planning policy guidance in PPS6 may be three times the length of its Welsh equivalent in Planning Policy Wales and TAN 4, but, at the moment, the message is essentially the same. However, is this set to change?
At the time of writing the Competition Commission (CC) has just published its provisional remedies, relating to the supply of groceries in the UK. The CC has concluded that local market concentrations have an adverse effect on competition and are proposing two separate measures to remedy this – one to address existing areas of high concentration and the other to prevent such areas emerging in the future. The latter would be in the form of a competition assessment whereby the OFT would have to be consulted on many planning applications for food retail development and would advise on which of the major supermarkets could occupy the new floorspace.

Two alternative ways of introducing this test have been suggested by the CC. Its preferred method would be to include the OFT as a statutory consultee on all applications for new or extended stores of over 1,000sq m net. The OFT would then apply a series of tests based on the existing retailers operating in a defined catchment area and their total net floorspace and advise the LPA on whether any restrictions should be placed on the eventual occupier of the proposed space. This would apply throughout the UK.

At the same time, the CLG is preparing to consult on proposed changes to PPS6 which would see the current need and impact tests replaced by a new impact test in England. There is no current proposal to amend the Welsh guidance in the same way.

So will these changes be significant?
The effects will depend to a large degree on the final details of both the CC recommendations and the changes to PPS6. However, as the trade areas of stores and centres are not restricted by such boundaries, it is interesting to speculate as to the effect, particularly on areas close to the England/Wales border.

For non-food schemes outside a town centre, it would seem in theory, that in an area where there is limited spending capacity, it may be easier to satisfy the revised PPS6 tests in England than those in Wales. However this may be less influential in practice, as demonstrating need for comparison goods is often easier, given the annual increase in expenditure on such items. Moreover any large scheme with a significant trade draw or turnover would still have to demonstrate that any impact on other centres would not be unacceptable.

For food store proposals however the changes proposed by the CC are potentially more significant and will apply across the UK. Also the test would apply to all foodstore proposals, including those in-centre or on an allocated development site, which are currently exempted from the quantitative need test. Thus in England any simplification of the PPS6 test could be off-set by the introduction of a competition assessment.

In Wales, with the needs test retained and the additional competition assessment also to be satisfied, in theory things will be more difficult again.

The final recommendation by the Competition Commission is expected in May and the responses of the English and Welsh Governments’ will therefore be awaited with great interest.

For further information contact us on 029 2043 5880