Mary Portas told the economy needs less red tape, not more

The government has rejected the big weapon Mary Portas wanted to use to level the playing field between out-of-town and high street shopping, in what could prove a crucial week for the future of supermarket planning.

Her call for action was, from the start, economically unrealistic against a backdrop of financial crisis. That frank admission came, not from critics of the Queen of Shops’ review, but the lady herself.

Portas admitted her gut instinct was to unleash an immediate moratorium on any new out-of-town developments, but she instead settled, in her final report, on a call for all such developments to require secretary of state sign-off. Now, three months later, that proposal too has bitten the dust after the government gave its verdict in its ‘Portas Plus’ report and made it clear that sustainable economic growth was going to be the key driver of its planning strategy.

Two key developments within days of each other have left developers for the big supermarkets breathing a sigh of relief, while other organisations sharing Portas’ fears are fuming.

While it accepted virtually every other recommendation made in the Portas report, the government said the sign-off plans flew in the face of its localism agenda. Meanwhile the new National Planning Policy Framework (NPPF), released last week, gave local authorities an overriding instruction that planning applications should be approached with a presumption in favour of sustainable development.

The NPPF, a 50-page document replacing a 1,000-page tome of previous planning guidance, does include specific sections called for by Portas and other bodies - setting out a tough sequential approach that local councils must follow to prioritise developments in town centres. But legal experts working with the big supermarkets were this week confident that the policy would be at worst “neutral” to future expansion plans, be they in or out of town.

“Overall the planning pendulum has certainly swung towards permission being granted,” says Marnix Elsenaar, head of planning at Addleshaw Goddard, whose clients include Sainsbury’s. “I think there are some good ideas in the Portas Review but it ignores that great elephant in the room - the economy and jobs.”

With two thirds of all new-build activity driven by the supermarkets, the government’s response to Portas’ call was to “continue to use sparingly” a rule that has seen just one out-of-town development rejected since 2008.

Ministers have been heavily influenced by the economic arguments in favour of reducing restrictions rather than piling more on, with LSE research last year claiming restrictive planning policies had reduced productivity in the retail sector by 20%, leading to high prices that particularly hit the poorest households. Supermarkets were smaller than they would otherwise be, there was less competition and planning applications dragged on for years, it found.

“A lot of retailers were up in arms about the plans for secretary of state sign-off, which would have brought another heap of red tape,” said another lawyer working on planning on behalf of one of the big four.

The CEO of one organisation closely involved in talks over Portas and the NPPF adds: “The vast majority of planning consent in the pipeline is from the big four and the government has shown it is simply not prepared to challenge them. It’s a massive cop out,” she adds. “If you speak to anyone in the planning business, everyone bar none says the whole Portas process will prove to have been absolutely worthless.”

“Anyone in planning will say the Portas process will prove to have been absolutely worthless “

CEO involved in talks

However, construction and planning experts say that while the week’s developments could have worked out much worse for the big supermarkets, they are far from a green light for unhindered expansion. “The NPPF is clearly seeking to direct new commercial investments towards revitalising the nation’s town centres and we believe the tough sequential approach definitely means there are more barriers to out of town,” says Allan Wilen, economics director at analysts Glenigan.

Other economic factors are likely to have just as much influence on future planning as the two reports. Tesco CEO Philip Clarke’s recent decision to slam the brakes on the rollout of big hypermarkets was driven as much as anything by the way internet shopping has rocked the retail status quo, and recently supermarkets have identified smaller, in-town stores, as the way to get the quickest returns and highest margins.

Meanwhile the Portas Report, while accused by its critics of being full of gimmicks and lacking real teeth, has captured incredible interest across the country, with 360 towns submitting applications for the first wave of pilots receiving a mere £100,000 to test new ideas. “Virtually every area in the country wants to save their high street. Big supermarkets will want to think twice about any strategy that is seen to fly in the face of that public feeling,” says Martin Blackwell, chief executive of the Association of Town Centre Management.

Yet the government has also made it clear it is extremely reluctant to get into confrontation with one of the few areas of the economy that has been creating jobs and growth, which will mean planning policy in the future will, more so than ever, be left to local politicians with probably only one definite winner - the lawyers.