Comment

Good for growth: The NPPF gets a pro-investment makeover

The Government published its proposed reforms to the National Planning Policy Framework (NPPF) for consultation on 16 December[1]. The reforms are far ranging and detailed.

Never ones to get lost in the detail, our Economics team has reflected strategically on the proposed reforms and what they mean for economic growth. They have found lots to be positive about and conclude that the reforms, if implemented, could play an essential role in creating investor confidence and shifting the dial towards economic growth in 2026.

Below are the top five reforms that we believe have the potential to help deliver sustainable economic growth.

Top five reforms

1. According more weight to economic considerations

Policy E2: Meeting the need for business land and premises signals clear intent to support business growth and in pursuit of this states that “substantial weight should be given” to:

• The economic benefits of proposals for commercial development which allow businesses to invest, expand and adapt; especially where this would support the economic vision and strategy for the area, the implementation of the Industrial Strategy35, support improvements in freight and logistics and/or reflect proposals for Industrial Strategy Zones and AI Growth Zones; and
• Benefits for domestic food production, animal welfare and the environment which can be demonstrated through proposals for development for farm and agricultural modernisation.

According to substantial weight in a national policy to the economic benefits of proposals affirms the importance placed by the Government on realising its economic ‘mission’.

The proposed changes will allow businesses and investors to demonstrate how their proposals align with the economic vision and plans for areas, multiplied up to a national scale of impact and contribution where applicable. Critically these considerations will have to be accorded substantial weight. This should have the effect of ensuring that business investment needs are “hard wired” at the plan making stage and facilitated through informed decision taking, building on up-to-date evidence of need and impact.

2. Greater responsiveness to market signals and location requirements

Policy E2: Meeting the need for business land and premises also accords more importance to market signals and understanding the location requirements of specific sectors in demonstrating whether an unmet need exists.

Provision 2. (a) of the draft policy highlights the need to consider a range of factors including: market signals of undersupply; catchment areas for proposed development; the evolving needs of business sectors and availability of land and buildings. This commercial reality and market “check” will help to support business growth by ensuring that up-to-date evidence is continuously factored into decision making.

Provision 2. (b) of the draft policy provides a welcome focus on the specific location requirements of development proposals and the extent to which they are met by existing allocations in the development plan. The range of factors that need to be considered include (but are not limited to):

• Business plans to expand or improve premises;
• The growth needs of business clusters (including their need to be supported by not only property for occupation but “associated facilities and infrastructure”);
• The availability of infrastructure and opportunities to co-locate large scale generators and users of power; and
• Proposals that would meet the local, regional or national need for provision of new, expanded or upgraded facilities that would result in more efficient, reliable or sustainable handing of goods.

These are progressive reforms designed to ensure that the evolving needs of businesses and sectors are factored into plan making and decisions.

3. Better alignment of investment plans with planning strategy and policy

Policy PM1: Spatial Development Strategies (c.) provides a clear and explicit requirement for plans to support economic growth, giving spatial expression to the strategic elements of Local Growth Plans and the National Industrial Strategy.

The proposed policy is also drafted to ensure that Spatial Development Strategies provide greater certainty about the locations of essential infrastructure (an enabler of economic growth) as well as a longer-term pattern of growth extending to 20 years. The proposed reforms should lead to greater confidence and certainty for investors in places.

The proposed role of Spatial Development Strategies in identifying broad locations for strategic development (provision b. of draft Policy PM1) can potentially help to reduce incidences of strategic developments that meet larger than local needs (e.g. proposed new settlements) being stymied at a local level.

These reforms are a positive step in aligning planning strategy with economic and investment plans for areas and ensuring that strategic needs are met.    

4. Recognition for “modern economy” sectors and infrastructure

Policy E1: Providing the conditions for long term economic growth (c.) provides a welcome recognition that plan making needs to facilitate and meet the needs of the modern economy. Helpful definition and clarity is provided including the recognition of the need to plan for:

• Clusters, networks and sites for knowledge and data-driven, creative or high technology industries; and for new, expanded or upgraded facilities and infrastructure to support the growth of these industries (including laboratories, campus facilities, data centres and associated generating capacity, and grid connections);
• Storage and distribution operations at a variety of scales and in suitably accessible locations that allow for the efficient and reliable handling of goods, especially where this is needed to support the supply chain (including ‘last mile’ deliveries), transport innovation and decarbonisation; and
• The expansion or modernisation of other businesses of local, regional or national importance to support economic growth and resilience (including industries such as leisure and tourism which may be of particular importance in certain areas).

The Government is also seeking views on data centres and onsite energy generation. The focus on the specific needs of the digital economy is a step forward in ensuring that the planning system enables the infrastructure that the UK needs.

It is encouraging to see the Government recognising the distinct needs of business sectors, going far beyond the blunt tool of use classifications. This is a progressive step that, if implemented, should lead to more effective plan making and decision taking in relation to business and investment propositions.

It is also good to see an implicit recognition for businesses of local, regional or national importance. The citation of industries such as leisure and tourism provides appropriate acknowledgement that for some places these sectors will be more significant than knowledge and data driven industries for the foreseeable future. The proposed policy thereby builds in flexibility to respond to the nuances of local economies and their distinct priorities.

5. Greater use of development orders

Policy DM9: Use of development orders provides encouragement for greater use of Local Development Orders (LDOs) and Mayoral Development Orders, especially where this would support housing, regeneration, economic growth or environmental improvement. The use of these tools has the potential to create greater certainty for prospective investors and reduce the risks associated with securing planning permission. Such de-risking tools will be an important enabler in delivering the Government's ambitions for station-side development where there are complex urban regeneration challenges to deliver comprehensive schemes and unlock housing delivery.

Conclusion

The proposed changes provide a more favourable planning policy context for economic growth and investment in 2026 and beyond. Collectively they have the potential to shift the dial towards growth if implemented in the form that is being consulted upon.

For more information on what these changes could mean for your place, portfolio or property please get in touch with a member of our Economics team. 

19 December 2025

[1] National Planning Policy Framework: proposed reforms and other changes to the planning system