Freeports: A Petri Dish for Planning Reform  

Following the conclusion of the Freeports Consultation in July 2020 (see our previous article here for an overview of the key issues), the Government has launched the bidding process for Freeports in England.

The Bidding Prospectus provides a guide for bidders and introduces a deadline of 5 February 2021 for the submission of bids. It also provides more detail on the Freeports model and the legal changes that will support it.

Planning reform is at the centre of the Freeports policy. This is not unexpected, as the proposals do not sit comfortably within the existing legal and policy framework: it was evident from the start that substantive changes to planning law would be required to maximise the benefits of Freeports.

More interesting, perhaps, is the Government’s intention to use Freeports as an opportunity to “test ambitious planning proposals” by “taking advantage of the controlled spaces that Freeports offer”. If Freeports are the Government’s controlled planning experiment, what can they tell us about the future of planning?

Zonal Planning

The Prospectus emphasises the importance of Local Development Orders (“LDOs”) at Freeports: they appear to be the Government’s chosen method for delivering the simplified, flexible planning system identified in the Freeports Consultation. The Prospectus states that bidders will be required to provide evidence on how their Freeport plans could be supported by an LDO. The Government further commits to providing assistance to successful bidders to implement LDOs in their areas.

LDOs are made by local planning authorities and effectively grant planning permission for certain types of development in specified areas, removing the need for a full planning application – a form of zonal planning. The concept will be familiar to some following the Planning White Paper’s introduction of zones – the Growth, Renewal, and Protect areas - in local authority plan-making.

Permitted Development (“PD”) Rights

The Prospectus confirms that the Government will amend the Part 8 Class B rights of the Town and Country Planning (General Permitted Development) (England) Order 2015 to align PD rights so that all types of port benefit from the same PD rights. This is important to ensure consistency between Freeports, particularly given the potential for multi-modal Freeports, and the fact that seaports currently have more restrictive PD rights than those available to airports or rail ports, which benefit from a PD right for the development of ‘operational buildings’ for purposes connected with the provision of services and facilities.

A challenge with PD rights, however, is their broader applicability: they are often limited to statutory undertakers and operational land, which is a relatively narrow concept which applies to restricted areas of land. This may restrict the use of PD rights by new entrants to the Freeports market, or to additional land that does not fall within the definition of operational land. PD rights are also subject to restrictions in the case of EIA development and development that is likely to have a significant effect on a European site. It is not clear how the Government’s proposed consultation on EIA will affect this (if at all).

The Prospectus leaves open the opportunity to consider additional bespoke amendments to PD rights to “support the specific needs of seaport developments”. Limited detail is provided in respect of what these amendments could entail and there is no suggestion that the Government intends to consider reform of PD rights beyond those which apply to seaports, although it would be open to the Government, and likely beneficial to Freeports, to do so.

Reforms to PD rights alone, particularly if the reforms consist only of the necessary but unambitious alignment of rights between ports, will not be sufficient to achieve the streamlined, flexible planning process that the Government envisaged, but perhaps the intention is to achieve this through the other avenues set out in the Prospectus and discussed in this piece.

Environmental Impact Assessments (“EIA”) and Habitats Regulation Assessments (“HRA”)

The Prospectus confirms that Freeports will need to comply with all relevant environmental regulations and standards, including EIA where applicable. For Freeports, particularly sea-ports, it is likely that EIA will be required as the threshold for an EIA is lower for port development than for other types of similar development. The Prospectus acknowledges this and identifies the knock-on effect that this has on the ability to rely on PD rights (given the restrictions noted above) and states that the Government intends to consider how “environmental assessment can be streamlined”.

The Prospectus does not provide us with any further detail and does not comment on the position regarding HRA, so it remains to be seen what this “streamlining” will look like. This warrants detailed analysis because the time-consuming nature of these assessments could undermine the idea of a simplified planning process.

‘Front-loading’ assessments at the zonal planning or LDO stage could be one solution. This would involve an early ‘plan-level’ HRA or strategic environmental assessment to set the framework and identify suitable and unsuitable sites, and would ensure that development is not unduly delayed or frustrated at a later stage by failure to meet the relevant thresholds. Crown Estate Scotland’s approach to Scotwind, promoting a sectoral marine plan and plan-level habitats regulation assessment alongside offshore wind leasing is a good example of how to promote such schemes.

This is a particularly interesting area to watch as an indicator of what the future planning system could look like, as EIA might be in the Government’s firing line with a consultation promised.

Interaction with Policy

A streamlined planning process for Freeports will only be successful if Freeports sit within an integrated, coherent policy framework – encompassing marine, land and infrastructure planning. In particular, the way that the Freeports policy links with the recently published National Infrastructure Strategy will be important, as a joined-up infrastructure and logistics strategy will be key to the success of the Freeports initiative and to ensuring that it brings positive change, such as decarbonisation and job creation.

For example, a joined-up policy could allow Freeports to support the development of industrial clusters as part of a move to a hydrogen gas network, or the delivery of future offshore wind capacity. Further, the introduction of multi-modal freeports, supported by coherent policy, could play a key role in developing a streamlined, decarbonised logistics sector.

The Prospectus sets out the Government’s intention to review the National Policy Statement for Ports in 2021, but this alone is inadequate. Arguably, the National Planning Policy Framework or the Planning Practice Guidance would be better placed to provide support in the first instance but, in any event, multiple changes to policy will be required to ensure a coherent framework, perhaps alongside a specific Freeports National Policy Statement.

Comment

The success or failure of the Freeports policy turns in no small part on the decisions made on the planning and infrastructure elements of the proposal. In our view, the extent to which the proposals are integrated with new and existing policy is key. There has been a plethora of recent changes to planning and infrastructure policy, with still more on the horizon. The question is whether these will create a supportive, coherent framework within which Freeports can operate smoothly, and which could legitimately form the basis of wider reform beyond the Freeport boundary, or whether the policy jigsaw will undermine the goal of ‘streamlined planning’.