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Growth announcements good start, but better understanding of planning needed

03 July 2014

Securing long-term growth across Britain will likely dominate political discourse in the run-up to next year’s election and both major parties are wasting little time. Last week Chancellor George Osborne outlined a vision for a ‘Northern Powerhouse’ uniting cities in the Northwest to serve as a complementary global city to London. And this week Labour Leader Ed Miliband and Lord Adonis unveiled a comprehensive strategy Mending the Fractured Economy designed to re-balance the economy and devolve power to local areas.

These are positive steps the Conservatives and Labour have taken, however, both parties could benefit from a better understanding of how planning can unlock growth. In Fostering Growth, RTPI identifies four main ingredients for economically successful places including infrastructure, housing, education, and place. The Institute argues that through an understanding of the spatial relationship of these ingredients planning helps provide certainty, cost-savings and added value.

Creating a vision for growth

An overarching theme of Fostering Growth is the importance of creating a vision, and that is what George Osborne attempts in his Northern Powerhouse speech by building on previous work by The Northern Way, Atlantic Gateway and others. Osborne has received considerable attention from the suggestion of a high-speed rail link connecting Leeds and Manchester, but he more broadly recognises the importance of transport connectivity, knowledge, and local governance.

Lord Adonis has also presented a vision taking into account the North’s prominence during the industrial revolution, but acknowledging it now struggles to ‘keep up’. He proposes devolving spending power to combined local authorities to foster growth.

In an interview with the BBC, Osborne said he wants to avoid a ‘scattergun approach’, and instead bring ideas together to compete with other world cities. Cities are increasingly seen as the engines for growth and his argument is that Northern cities within close proximity working together are stronger than the sum of its parts. Some recognition of the spatial relationship of policies should be commended, but more is needed in relation to understanding how different elements work together. For instance, transport infrastructure has the potential to unlock sites for housing.

Osborne acknowledges in his speech that, “Global cities are also great places to go out. The economist Richard Florida has talked about the way that great cities are competing for the ‘creative class’ that powers economic growth. He’s shown how innovators and entrepreneurs are attracted to creative, cultural, beautiful places.”

Osborne acknowledges in his speech that, “Global cities are also great places to go out. The economist Richard Florida has talked about the way that great cities are competing for the ‘creative class’ that powers economic growth. He’s shown how innovators and entrepreneurs are attracted to creative, cultural, beautiful places.”

Luring the ‘creative class’ comes down to creating attractive places to attract and retain people to fill specific roles within the economy thus creating economically successful places. Ultimately place making can help convince the most qualified people to locate in a particular town or city.

At last week’s RTPI Planning Convention, Professor Tony Travers explained that the 39 Local Enterprise Partnerships (LEPs) covering England – designed to replace some aspects of Regional Development Agencies – have become the “settled will of the British political class”. Some may be surprised Labour has indicated LEPs would remain in place if they were elected into government. However, Lord Adonis believes LEP boundaries should be altered to take account of functional economic areas, which the RTPI has also raised in Fostering Growth.

Reviving cities

Adonis has suggested reviving cities, much like Osborne, however with specific focus on city regions or combined local authorities having control of £6 billion annually based on area’s retaining additional business rates revenue. In comparison the current Single Local Growth Fund – the result of Lord Heseltine’s suggestion of a £49 billion pot of money over five years – provides just £2 billion annually or £10 billion over five years. The first successful bids will be announced in the coming week, though LEPs have submitted bids within their Strategic Economic Plans well in excess of the £2 billion available.

Greater Manchester was the first combined authority created in 2011, but they are gaining in popularity in the North. In April, four additional combined authorities were established including: North East, Liverpool City Region, Sheffield City Region and West Yorkshire. Newcastle and Gateshead have already worked to establish an Accelerated Development Zone which includes Tax Increment Financing powers allowing growth in business rate income to be retained locally which has been considered to be a success to date.

In Fostering Growth the RTPI calls for further possible devolution which the Institute will expand upon in an upcoming Planning Horizons paper entitled Making Better Decisions for Places to be published in November. More on the RTPI’s decentralisation work can be found in the blog post “Power to the Cities?” by the RTPI’s head of policy Richard Blyth.

A recent comprehensive assessment on The Value of Planning has been conducted by Professors David Adams and Craig Watkins in recognition for the need of a balanced, more evidenced discussion on the relationship between planning and growth. More on this work can be found in “The value of planning – seeing the bigger picture” by Professor Adams.

A better understanding of the way in which planning can support growth will ultimately help to create more economically sustainable and successful places. The RTPI looks forward to working with all the political parties in the run-up to next year’s election to ensure there is a better understanding of the economic benefits of planning.

Jim Hubbard is Policy and Networks Manager at the RTPI focusing on economic growth and regeneration. On Twitter you can follow him @hubrd.