London’s Most Consequential Plan in Decades?

A plan for a different city

The new London Plan, the draft of which is expected to be published next month, is being prepared in a period of considerable shifting sands. It will need to grapple with a changing political situation, both nationally and locally, in a context of a sluggish economy that is being buffeted by external factors. It will also need to arrive at a strategy that can navigate this whilst delivering the development the capital needs. On this basis, it is not unreasonable to say that the Plan will be one of the most consequential planning documents London has produced in decades.

Much has changed since the current London Plan was adopted five years ago. The housing market is weaker, build costs are higher, interest rates have reshaped viability and the building safety regime has added new complexity to high-density development.

At the same time, whilst national policy has moved in a more pro-growth direction, the results of the recent local elections has the potential to create a disconnect between local and national objectives which could frustrate the pro-growth objectives of the 2024 NPPF (and soon to be published updated NPPF). The economic challenges are real and are perhaps best encapsulated in the collapse in housing delivery which resulted in the time-limited London housebuilding package.  This context highlights the need for the new Plan to be pro-development in its approach.

This is why the next London Plan cannot simply be a variation of the current one as it needs to properly grapple with the current challenges facing London. It will therefore need to make bold choices on what kind of strategic plan London requires as housing delivery, infrastructure capacity, industrial demand and climate resilience all compete for the same land in difficult circumstances.

 

The scale of the housing challenge

The headline number is now familiar but still startling. The new London Plan is planning to deliver 88,000 new homes per year, however delivery has been between 30,000 and 45,000 homes a year over the last decade and are trending downwards. The only period when London built at anything approaching the required level was the 1930s, when the city’s expansion was supported by very different economic conditions and rapid transport investment.

To more than double delivery is a considerable challenge, and a plan that states the target without changing the conditions for delivery will not be enough. The draft London Plan will need to identify exactly how this can be achieved.

 

Affordable housing needs realism as well as ambition

No planner working in London should understate the importance of affordable housing. More than 183,000 Londoners are estimated to be homeless and living in temporary accommodation, with boroughs collectively spending around £100m a month. Poor housing is also estimated to cost the NHS around £100m a year. A strategy that not only addresses the alarming reduction in affordable starts but that successfully tackles these underlying issues is key.

The next London Plan should continue to push for affordable housing, but it should do so taking into account the role other housing products could play such as Build to Rent (BTR), later living, student housing and co-living. Furthermore a more consistent approach from boroughs and, especially when the time-limited package is over, a realistic approach to viability constraints is reflected in plan preparation and individual decision making.

 

Industrial and logistics land must be planned positively

But London cannot function as a residential city alone. It needs land for logistics, servicing, utilities, creative production, waste, data, repair, construction and the less visible activities that keep a major city working.

The next Plan should distinguish between land that is strategically important for industrial, logistics, warehousing and infrastructure uses and land that is poorly located, poorly performing or better suited to mixed-use intensification.

This requires judgement in areas such as operational detail: yard depths, servicing routes, HGV movements, last-mile requirements, noise, hours of use, access to the strategic road network, proximity to wharves and the relationship with new residential neighbours. It requires an appreciation that co-location can work, but not everywhere. Mixed use schemes may play a greater role, but only where the market, policy and operational requirements align.

The reference in last year’s consultation to new industrial designations in lower-quality parts of the green belt, particularly grey belt, is significant. So too is the suggestion that the London Plan could set strategic industrial capacity targets. If the Industrial Strategy is to have meaning in London, it must be translated into land use policy. That means local plans identifying, protecting and allocating the right sites for industrial and logistics activity, not merely acknowledging that the sector is important.  This could, for example, be achieved by releasing currently safeguarded industrial sites that don’t meet the needs of industrial occupiers for other uses (including residential), off-site by  identifying other sites that better meet the current market (e.g. within the grey belt).

 

Local plans will decide whether the strategy works

A strategic plan can set the direction, but delivery depends on borough local plans, development management decisions, infrastructure funding and the confidence of landowners and investors. London’s planning system often struggles because policy ambition sits at one level and practical decision-making sits at another. It feels this become harder since the local elections, but is imperative that there is joined-up thinking. If not the Mayor may need to be more muscular in using his call-in powers to achieve the desired delivery objectives.

The Government’s proposed further revisions to the NPPF are relevant here. This consultation aims to prevent unnecessary repetition or divergence in local plans. Given the sheer number of policy requirements, a streamlined London Plan that provides the strategic approach to borough wide plans, with reduced development management policies, should be taken in order to reduce unnecessary burdens on developers.

 

Is enough being done?

The previous Towards a New London Plan consultation asked many of the right questions. It also acknowledged that various sources of supply will be necessary in order to deliver 88,000 homes a year.

But the test of the draft plan will be whether it can deliver on the ambitious housing targets while giving equal attention to industrial and other land uses. The city’s economy was worth almost £500bn in 2022, accounting for around a quarter of UK output, and employment is forecast to grow by around 800,000 jobs by 2050. Those jobs will require homes, but they will also require premises, infrastructure and logistics networks.

If the next London Plan can provide a credible spatial route to 88,000 homes a year, turn affordable housing ambition into a delivery model that works through both policy and funding, plans positively for industrial and logistics capacity as part of economic growth and gives boroughs and decision-makers enough clarity to make development happen, then it could be the most significant planning document for London in decades.