The British Government’s proposed reforms to the UK planning (zoning) regime, issued in May 2007, are the strongest indication yet that economic development might be embraced as a criterion in the determination of planning applications. The implications for retailers are significant.

The existing “needs test”, which requires applicants to demonstrate the need for any retail proposals outside town centres, is described in the proposed reforms as a blunt instrument which can have the unintended effect of restricting competition and limiting consumer choice.

The White Paper (the form in which UK legislative reform proposals are put forward) states that the Government has two clear objectives for town centres: to support current and prospective town centre investment; and to ensure that the planning system promotes competition and consumer choice, and does not unduly or disproportionately constrain themarket.

The Government will therefore review the current approach to assessing the impact of retail and leisure proposals outside town centres. A new test will be introduced which promotes competition and improves consumer choice.

Local plans should acknowledge out-of-town locations where retail development will not have a detrimental impact on existing town centres.

These specific changes are set within a general context where planning “has a clear role in setting a positive framework which enables sustainable development to happen” and where local authorities “must pay full regard to the economic…benefits of sustainable new development.”

The Government will be developing new guidance on these matters, working with the retail industry and other important stakeholders and taking into account the conclusions of the Competition Commission’s inquiry into the groceries market. Any changes will be finalised by Spring 2008.

All those involved in retail development will welcome both the pace and the content of these reforms.

Against this, retailers should also be aware that the White Paper is proposing much higher environmental standards for retail development. Retail outlets are specifically identified as being easily able to be built to a zero-carbon specification. So while it may soon become easier to secure approval in principle for new retail developments, developers will need to be ready for ever higher standards to be applied to the environmental performance of their buildings.