Levelling up and Investment Zones: wholescale change or unworkable inconsistencies? By Sarah Cox, Partner Carter Jonas (Leeds)
In the context of the political and economic upheaval that occurred during 2022, it is increasingly difficult to predict the future of planning policy with any certainty.
Last February’s white paper launched the levelling up agenda; draft legislation for which was produced in May in the form of the Levelling Up and Regeneration Bill. But levelling up appeared to drop off the agenda following the replacement in July of Michael Gove with Greg Clark and then Simon Clarke. It has since regained momentum upon Gove’s return and is progressing through Parliament – although not without controversy.
We have seen similar consternation over Investment Zones, which were launched by Liz Truss in September but have disappeared in all but name under Rishi Sunak’s premiership.
The current reality of political dynamics makes substantive legislative change seem some way off.
Are Investment Zones consistent with levelling up?
The original Investment Zone concept was that areas were identified for accelerated growth, free of regulation and certain taxes. In contrast, its replacement is less ground-breaking, intended to refocus investment around established R&D and so to build on existing investment rather than create new growth areas.
Ironically the original concept of an Investment Zone was arguably more closely aligned with the levelling up agenda than its replacement.
The revised Investment Zone strategy is aligned – to a degree – with the philosophy of the Oxford Cambridge Arc (which was ‘dropped’ early in 2022) than it does with the revived Levelling Up and Regeneration Bill. Like the Arc, today’s investment zones are intended to develop areas with proven capabilities in science and technology (or areas with a clear prospect to have the capability), specifically university cities. Like the Arc, investment zones risk reinforcing already prosperous areas without delivering the ‘ripple effect’ of regeneration.
So will investment zones evolve to be compatible with levelling up in 2023? To succeed in the context of levelling up, the benefits must extend beyond the R&D hubs themselves and into the ‘hinterland’, providing the necessary housing at an affordable level, connected by sustainable public transport.
The fate of the Arc was sealed when the proposed transport links between Oxford and Cambridge were scrapped and plans for housebuilding fell away. The location and development of investment zones elsewhere could learn from this: investment in the areas surrounding universities in Manchester and Leeds, for example, could have a considerable impact on levelling up and regeneration if the towns between the two can be bolstered by the Northern rail line; but to focus investment in the cities at the expense of the towns would be counter to levelling up.
Wider levelling up and the economic context
The levelling up agenda is much more than housing and connectivity: nationwide broadband, fixing the education gap, skills training, narrowing the life expectancy gap, increasing wellbeing, decreasing inequalities and crime reduction all feature in its original manifesto.
Consistent with the promises made in the Levelling Up White Paper, the 2022 Autumn Statement gave the go-head to further devolution in Birmingham and Manchester. Can this help bring about levelling up, in all its forms? Essentially this will depend upon the financial impact of devolution, which is not yet clear.
In the case of planning and development, devolved administrations can have the power to unlock new sites for regeneration, but they also need the funding. Will they have the borrowing power, access to business rates or to increased council tax revenues? Will devolved administrations have the influence to attract strategic (potentially overseas) investors to fund large-scale projects? And how will this be impacted by a downturn in the economy?
Political realities
While considerable attention is paid to the Levelling Up and Regeneration Bill, many question whether such a contentious piece of legislation will enter the statue book during this parliamentary term. Political opposition has already slowed its progress and is likely to remove the imperative to push it through.
But there is another mechanism by which planning reforms can take place: the suite of development policies intended an appendix to a revised NPPF would provide the opportunity for changes in policy on issues such as affordable housing, energy efficiency. But the revised NPPF has been published and the scope of development policies is very limited.
Despite the enormity of political and economic change last year, actual change to planning policy has been minimal. History has shown than the bolder the planning policy, the less likely it is to be enacted. A more realistic expectation for 2023/24 is some ‘tidying up’ of policy through guidance following a robust consultation on the revised NPPF. The potential for a dedicated and focused planning bill may remain on our wish list for a few more years to come.
