Supermarket sweep?

This week the government has published the long-awaited proposed revisions to its planning policy for town centres and retailing (PPS6). In launching the consultation the secretary of state Hazel Blears said "I want to see our town centres and independent shops busy and thriving and I'm absolutely committed to help defend their future...We need a policy which provides the right degree of protection for smaller retailers." The launch statement goes on to say that the "blunt and simplistic" and "dysfunctional" need test is, in part, being replaced by a "tougher" impact test.

Whilst the documentation does not confirm one way or the other if the government will be pursuing the introduction of a 'competition test' for food stores. It confirms that the government will respond on the Competition Commission's recommendations "shortly", and that "today's consultation on PPS6 is a clear signal of intent that will reassure town centre managers and independent retailers up and down the country."

In summary, the thrust of the changes suggest a greatly enhanced role for the issue of competition and economic performance in planning decisions. Nearly all of the supporting analysis and justification for the revisions concentrates on the perceived constraints of current policy on the large store sector. The changes could be seen as easing the development of such new stores. Given the launch statement, amazingly there is nothing of substance in the document on the government's intended policy for small and independent retailers. So what are the proposed areas of policy change, and the implications?

As widely anticipated, the “need test” is being removed as a consideration from the development control process. However, in the course of preparing their development plans, regional and local authorities will still be required to undertake an assessment of need in order to assess the quantum and type of allocations for new floor space for which they should be identifying sites.

The role of impact testing within plan making is now more pronounced. It is also taken as a given that large scale developments will have an impact on local centres. The result of this is likely to be a level of rigour within retail assessments forming part of planning authorities' evidence base not often seen to-date, and much more emphasis on the role of inspectors judging if such proposals are sound. The challenge will be to ensure there are enough inspectors with these specialist skills.

The draft PPS6 recognises that 'impacts' can be positive as well as negative, and thus the process of impact testing wMichael Crook and Bruce Hartley-Raven, RICS ill be the balancing of all of these disparate matters to give an overall conclusion on impact. In reality, this is no different to the process of determining retail proposals under the current policy.

As with some other recent government policy publications, the perceived economic benefits of competition are given greater and explicit prominence. Promoting competition between retailers and enhancing consumer choice is now the second most important objective of PPS6 after the protection of town centres, and the point is reinforced by the reference to "raising productivity and the growth rate" as another secondary objective.

The draft PPS goes on to say that planning policies should be under-pinned by economic data, and even makes explicit reference to the monitoring of the pricing of goods as a driver of planning policy formulation.

Given the fanfare of the ministerial announcement, it is nothing short of amazing that the proposed modifications to the policy contain no new powers specifically designed to define and protect small shops.

The message from the government could not be clearer; planning authorities must give considerable weight to the promotion and furtherance of economic objectives.

What is not quite so clear at this stage is the weight that will be given to such factors in the development control process. The clue is in the proposed abolition of the “need test” for applicants promoting development on edge or out of centre sites not in accordance with the plan. If planning authorities don't identify sufficient sites, they may find consenting schemes harder to resist on unallocated sites.

Given the above, it is surprising that the draft PPS does not make explicit the government's stance on the competition test put forward by the Competition Commission. At face value all the indicators suggest that the government will in due course introduce this, but will it be part of the planning system? Not only is this now the subject of a legal challenge (and hence probably why no mention of the test is made in the draft), there is also the curious inclusion of the wording "the identity of the occupier is not normally material to a planning decision". An essential component of the competition test would be the granting of consents either personal to, or preventing occupation by certain retailers. Thus, it appears the Government has left the door ajar to make a late call on whether to include the competition test or not.

Given the fanfare of the ministerial announcement, it is nothing short of amazing that the proposed modifications to the policy contain no new powers specifically designed to define and protect small shops. All that is suggested is that planning authorities may find it appropriate to pursue "clear, locally specific and flexible policies" to protect the established character of certain shopping centres.

Without a clear definition of what constitutes small or independent retailers the high probability is that most local authorities will, at best, struggle to put together sound policies that provide any meaningful protection for the sector.

All of which brings us back finally to the government's most important objective of planning for the growth and development of existing centres. The documentation explains that between 1994 and 2005 the proportion of new retail floor space located within town centres as a proportion of all retail floor space increased from under 25% to about 40%. The trend flattened off between 1994 and 1996, when the forerunner of current policy (PPG6) was published.

PPG6 only required need to be taken account of in the plan making process, not development control. Through a series of controversial decisions and case-law this eventually led to the Caborn statement in February 1999 bringing development control within the orbit of need. It is perhaps no coincidence that the proportion of new town centre development only materially increased after this point.

Thus, the ultimate question remains whether the government's latest proposed policy changes will take us back to the pre-1999 position for retail development trends, and the very opposite of what the policy is intended to do.