NPF4 call for ideas: analysis of responses

Business and employment

Proposed key objective of NPF4: To promote business and industrial development that support sustainable and inclusive economic growth while safeguarding and enhancing the natural and built environments.

Please note that a number of responses set out one or more proposals for new or continuing National Developments or for other investment priorities. Many of these proposals included opportunities for business growth and were expected to generate employment opportunities. These were sometimes through the delivery of the proposed project, for example through construction jobs. Some proposals, for example those related to the development of business parks, were designed to bring in employers to an area. A number of the proposals involved the re-use of brownfield or VDL, including large sites connected with the decommissioning of power stations or the closure of large industrial facilities.

Some respondents also provided information about their own sector or their local or regional economy, including in relation to challenges or opportunities. The focus of the analysis presented below is on general and systemic issues raised by respondents.

Among general comments, there was support for the proposed key objective including because:

• Sustainable economic growth will assist in reducing poverty and inequality across Scotland.
• It is in line with the policy approach in SPP.

Key features or characteristics identified as required of the overall policy approach were that it should:

• Provide certainty to businesses and communities.
• Be flexible enough to respond to rapid economic change, including the changes which will result from technological advances.
• Promote policies that will tackle climate change.
• Protect the most important environmental assets from development.

It was suggested that, in preparing for structural economic change, the planning system needs to focus on improving the evidence base to support economic development in NPF4 and subsequent development plans. A far stronger focus on the evidence-led approach to economic development - including focusing on what is possible where - was seen as key to ensuring that aspirations are delivered and to ensuring society reaps the potential rewards. It was also suggested that as planning will need to address geographical disparities in the distribution of economic growth (as below), more assessment of what is happening at a regional level may be required.

In addition to being evidence-led, suggestions included that:

• It will be important for NPF4 to provide a clear delivery framework to maximise opportunities in the key economic growth sectors while recognising that the delivery of sustainable and inclusive economic growth requires the creation of a diverse economy rather than one overly focused on 'key sectors'.
• Planning should strive to be proactive, ambitious and not be constrained by the fear of causing political difficulties. The planning system is in a position to make bold and enlightened decisions on major projects and should take this opportunity.
• The delivery of inclusive growth will also require geographical disparities in the distribution of economic growth to be highlighted. NPF4 will need to be flexible in its approach to recognising that there are opportunities and challenges in delivering sustainable and inclusive economic growth which will vary across the country and future strategic investments require to be targeted recognising the distinct strengths of different regions.

Spatial disparities and challenges

Other comments also addressed variations across the country and the importance of NPF4 considering the needs of different parts of Scotland. The responses of local authorities or public bodies representing or working across different regions of Scotland often provided information on the particular challenges or opportunities affecting their area.

It was suggested that, for inclusive growth across the country to be achieved, NPF4 should both prioritise investment in areas where growth lags behind and also ensure a regional approach is taken to enable economic growth. It was suggested that RSSs will help with this.

One spatial disparity highlighted was that between east and west. It was reported that economic activity, investment patterns and associated demand for house building, contrasts significantly across Scotland, particularly in terms of an east-west divide across central Scotland. It was suggested that NPF4 should be informed by a revised national economic strategy that considers the disparity of investment and growth between the east and west coast areas of Scotland. Similarly, there was a call for the prioritising of rural and western communities to reduce population shift to the east of the country.

Another perspective was that the Glasgow-Edinburgh corridor dominates the Scottish economy and that a major objective should be to distribute economic activity and development more equitably throughout the country.

With reference to the Edinburgh and South East Scotland Region, it was reported that, although economically this region is the strongest and best performing in Scotland, this success is not experienced by everyone, and there are significant and persistent pockets of deprivation in the region. A successful future was seen as depending on a more inclusive distribution of the benefits of growth, so that it can reach those communities most in need.

It was suggested that, in order to improve prosperity and wellbeing in areas of Scotland which are lagging behind, NPF4 should provide the framework for more active regional policy, and should do this by:

• Reinforcing a coherent approach to the development of Scotland's regions, as set out in the Enterprise and Skills Review's workstream on Regional Economic Partnerships.^[13]
• Supporting the alignment of spatial priorities and investment funding. It was suggested that Regional Partnerships will play a critical role in shaping the regional prospectuses and that, from the national perspective, NPF4 could focus on reducing the regional disparities that exist and encouraging investment opportunities towards economically 'cold areas'.
• Creating the conditions to support the proposals emerging from the Green Investment Portfolio. It was suggested that NPF4 could provide a framework to direct these opportunities where possible to the various communities and regions around Scotland which are falling behind in the post-industrial economy.

One note of caution was that, although there is value in planning for economic growth at a regional level, interdependencies within regions can also reduce economic sustainability at a local level and increase the prevalence of 'pockets of deprivation'. It was reported that this is beginning to be addressed in Scotland's Economic Action Plan,^[14] which references 'the importance of every place in Scotland', suggesting increased investment in local economic growth to address inequality.

City and Regional Growth Deals and Enterprise Areas

With respect to whether NPF4 should take account of the generative opportunities resulting from City Region and Regional Growth Deals, comments included that existing Deals are expected to play a key role in enabling development and investment in certain areas, including by supporting regeneration and job creation and in connection with National Developments.^[15] It was also suggested that planning has a key role in supporting City Region and Regional Growth Deals and needs to help make sure that local communities get the greatest benefit from them.

NPF4 was seen as providing the opportunity to ensure that City Region Deal and Regional Economic Partnerships are properly integrated with the development planning system. Suggestions as to how the approach should be taken forward included that NPF4 should:

• Drive the process and provide a strategic land use planning context for the individual project level developments.
• Identify national infrastructure priorities, which are then articulated in RSSs and LDPs then delivered through City Region Deals.
• Include an understanding of the intended economic outcomes and impacts of City Region or Regional Growth Deals, including identifying their planning and spatial implications. It was also suggested that, in considering this at a national level, NPF4 may also offer the opportunity to itself identify generative opportunities at a national scale.
• Ensure that while supporting the development of larger city regions through well-designed and targeted programmes, investment is also focused on the places and people potentially in danger of being left behind.

With respect to Enterprise areas, comments included that the initiative should be assessed to ensure that NPF4 meets its criteria and expectations and vice versa. It was suggested that the designation of and eligibility for Enterprise Area status should be looked at as part of the development of NPF4, and that it may be appropriate to refresh policy in order to enhance the attractiveness of locations to inward investment.

Connecting people to economic opportunities

The importance of connecting people to economic opportunities was highlighted by a number of respondents, with further comments including that planning must be responsive to how the different factors that influence the economy evolve. There was a call for this to be done in a proactive way, for example by:

• Recognising that access to opportunity is vital and that the inability to travel due to time or cost limits impacts on the most disadvantaged in terms of accessing employment, training or education.
• Increasing the opportunities to distribute employment to sustainable locations throughout communities by furthering support for diversification of town and local centres to accommodate businesses, providing jobs and institutions offering training and learning.

Further issues associated with business and industrial land or premises are discussed further below, but in this context, it was suggested that an approach focused on connecting people to opportunities could translate into:

• A shift of focus away from employment zoned land, including because this is often located in areas that are less easy to access by sustainable modes of transport.
• Redirecting more jobs and training to sustainable centres, with improved public transport. It was suggested that, while it may not be possible to provide job opportunities within every community, access to job opportunities within the wider area can be ensured through a well-connected public transport and active travel network in addition to the digital connectivity to allow flexibility in how people work and access employment.
• NPF4 exploring the promotion of employment activities in town centres in preference to employment designated lands and the repurposing of employment sites.
• Providing grant funding to local authorities to support economic development in disadvantaged areas.
• Public sector agencies, such as HMRC or the Scottish Government, dispersing back-office jobs to more rural areas and locations outwith cities.

In terms of links to placemaking, it was suggested that NPF4 should reinforce a whole system approach to place, and placemaking, by conveying a strong message that economic, business, health, and place outcomes are interlinked. It was reported that business in its widest sense often constitutes a key part of a successful and attractive individual place and that this message, and those links, need to be explicit within any document that seeks to put placemaking at the heart of it. Placemaking is covered further under the relevant theme.

Business and industrial land and premises

To enable planning authorities, and by extension LDPs, to allocate land which will meet the needs of various economic sectors, it was suggested that NPF4 should set out a process through which business and industrial land audits can be informed by:

• Up-to-date market intelligence, for example around take-up, availability and quality of existing business premises.
• Robust demand forecasting, in terms of quantity, location, size and quality of sites or new business units.

It was also suggested that active engagement and consultation with the business community through bodies such as Scottish Enterprise and the Federation of Small Businesses will be important.

It was reported that the annual take-up of economic land remains relatively low and, in a buoyant housing market, there is a persistent risk of challenge and change of use of allocated economic sites to housing. A Public Body respondent observed that, outwith their main city, market failure for the development of commercial property is almost total and that NPF4 needs to acknowledge these challenges.

Respondents also commented that changes to work practices (as discussed further below) will move many aspects of the economy online, and that this will affect the volume and type of business properties required. It was suggested that fewer offices will be required as the home working economy increases, and that retail will be almost purely experiential rather than practical and necessity based. However, it was also noted that manufacturing will remain a requirement, perhaps more so given the resilience-related messages to emerge from the COVID-19 crisis.

There was also a suggestion that many of the issues affecting the housing market, such as land and infrastructure availability and cost and construction costs, are all also relevant for commercial property, but that demand for commercial property can be very different to that for housing. It was suggested that there will be a continuing requirement to safeguard land for future economic development needs, and that economic development land should be seen as a long-term resource with short-term viability issues not allowing good employment sites to be lost. Suggestions regarding how this may be achieved included:

• Introducing a policy presumption against the loss of economic land to alternative land uses (outwith an LDP review).
• Public sector intervention in the market with planning taking a more collaborative approach to publicly owned land.
• Making developable land available for development should be an obligation for public bodies, to enable Enterprise Companies and local authorities to acquire land, service it and make it available to the private sector.

However, it was also suggested that while relevant policies must be prepared to protect existing business parks and premises, there should be flexibility to allow alternative developments if there is no ongoing demand within the sector currently using the premises and the buildings or a business park is unsuitable for any other business use.

More widely, it was seen as important that NPF4 supports a policy and regulatory framework that provides sufficient land for economic growth, including by promoting regeneration and redevelopment of existing under-utilised sites. This approach was sometimes connected with the importance of town and city centres offering potential in creating attractive working spaces for small and emerging business, including because they already offer access to transport and other facilities. It was suggested that further national incentives are needed to unlock city centres and enable flexibility in terms of how they are used to respond to the changing retail and working habits of the population. There was also a call for NPF4 to reinforce the 'town centre first' policy.

A specific suggestion was that consideration be given to updating the Use Classes Order to bring it more up to date with modern business practices and the changing nature of both city and town centres and business parks, technology parks and economic growth areas. This would allow more flexibility for the types of uses that are suitable and acceptable within these locations and ensure more control over what is now considered appropriate.

Other suggestions connected to how NPF4 or SPP should respond to issues related to business and industrial land and premises included by:

• Promoting job generation as the primary consideration in determining applications on economic land allocations.
• Requiring active travel and public transport links and services to be accessible to proposed development and to require off-site provision by developers to achieve this if required.
• Providing support for distribution centres linked to public transport routes/rail networks to support ease of access and delivery of goods.
• Using the masterplan consent area guidance (once agreed) to approve business developments instead of undergoing the full planning process.
• Using compulsory purchase powers.

New working models, including home working

A number of respondents commented on changing working patterns and their implication for the planning system, including meeting the key challenge of ensuring that premises and infrastructure meet changing business needs. It was suggested that the internet and e-commerce are likely to continue to be a key driver of economic activity, particularly with the trend of increase in remote working and including if daily travel is discouraged by climate change challenges and legislation. In particular, it was suggested that the trend toward home-working, widely seen as likely to be accelerated by the COVID-19 crisis, will lead to changes in requirements for both commercial and domestic properties. These were seen as likely to be around:

• Accommodating the need or preference for increased home or agile working as part of future development and investment. This may require a reconsideration of the size of houses and layout of residential developments as people seek additional space to work from home.
• There being more of a focus on mixed use developments which offer the potential to live and work in close proximity and which offer flexibility of use depending on demand.
• Requiring more central locations.
• The creation of more hub style business facilities, including office space hubs to accommodate local workers who may not have the facilities or desire to work from home but who wish to reduce their commute.
• Where the profile of business premises is not that required, taking a pragmatic approach to re-purposing developments for alternative uses.
• The regeneration of any derelict business land which is no longer suited to modern industrial purposes will be important.

The connection was frequently made between changes to working patterns and the need for robust and easily accessible digital infrastructure. It was noted that this requirement will apply not just to new developments, but also to existing areas and there was a view that, as the pace of change increases, the ability of this network to be easily and frequently upgraded should be a principal consideration. These issues are considered further under the Digital connectivity theme.

There were calls for legislation, policy and guidance to reflect these changes, including by facilitating, supporting and, where necessary, directing development. In terms of some of the best mechanisms for taking this agenda forward, comments included that:

• A national review and strategy would help inform local authorities' approach and should give consideration to any planning policy implications and principles including for live/work units. The national strategy should provide high level principles and allow regional and local strategies to be responsive to their situation.
• The changes required can be taken forward through Development Management policies. One local authority respondent reported that their LDP has a policy around ensuring that home working does not have any detrimental effects on the residential amenity of neighbouring properties. The connection was made to thresholds for material change of use remaining relevant (see further below).

Other comments relating to new models of working included that:

• Social connection should be enabled through how we create spaces to promote collaboration and socialisation to the benefit of the health and wellbeing of the workforce.
• The Scottish Government should strengthen its policies and incentives to enable and encourage businesses to expand home working, including to facilitate the dispersal of employment opportunities across the regions of Scotland.

Finally, it was suggested that a wider distribution of small businesses set up and working from business hubs and private homes across the country will be challenging for the planning system to respond to, as it will be more difficult to measure and support business development in this more disparate geographic form.

Responding to challenge - COVID-19 and Brexit

Beyond the impact on working patterns, the challenges that the COVID-19 crisis creates for the economy, including in relation to business and employment, were highlighted. It was suggested that the Place Principles will be key to the planning system's support of recovery, and that it is essential that NPF4 provides a framework of the key principles of good practice in the context of spatial planning for workplaces and locations.

However, it was also suggested that some of the answers to how to rebuild the economy will only emerge as the impact on different sectors, including on self-employment, becomes clear. Initial concerns included that transport, tourism, high value food, drink and manufacturing exports, SME businesses and the construction sector may be particularly badly affected, with the connection made between these sectors and rural and island economies.

It was also suggested that Brexit brings specific risks to island authorities, including because they benefit currently from high levels of support from a wide range of EU funding initiatives and because a high proportion of the island workforce is employed in Brexit sensitive industries.

Although very real concerns were highlighted, opportunities were also identified, including that in one area, recent investment in telecommunications infrastructure and e-schooling demonstrates the very real opportunities for high-value work, for example in the financial, legal or technology sectors, to be undertaken from home. The potential to build on such opportunities in a wide range of educational sectors was also highlighted.

In terms of COVID-19, the potential to support a green recovery, including by maximising the role of nature-based solutions in a new economy and supporting lower carbon lifestyles with the long term benefits they bring, was highlighted (and is discussed further below).

Rural and island economies

The particular challenges and potential around supporting business and employment in rural and island locations were highlighted. It was reported that the leading recommendation from the National Council of Rural Advisers' New blueprint for Scotland's rural economy (2018)^[16] was that a vibrant, sustainable and inclusive rural economy can only be achieved by recognising its strategic importance and effectively mainstreaming it within all policy and decision-making processes. It was suggested that NPF4 needs to recognise that the context and challenges are different in rural and island areas.

Further comments included that NPF4 should take the Islands Deal into account and should support businesses and employment in all settings including rural and islands. It should:

• Recognise that island and rural areas can support centres of excellence reflecting regional specialisms, such as aquaculture technology, on and offshore renewables and community led economic development.
• Promote rural and island areas as centres of excellence for 'non-traditional' rural sectors such as advanced manufacturing, digital technologies, and e-commerce, as part of a wider Economic Strategy.
• Encourage sectoral diversity and recognise the opportunities for growth in non-traditional rural industries at all levels. This is particularly relevant for sustaining communities in remote rural villages where an increase in self-employment, community land ownership, home-working and croft diversification has led to a move towards small scale economic proposals within rural settlements.
• Create communities of interest (hubs, digital and/or physical) where collaborative and co-operative endeavours can be encouraged and supported by government agencies. These should be used to incubate and promote new start-ups.
• Recognise that the viability of small schemes in rural communities should not be impacted by unnecessary mitigation. NPF4 should explicitly state that implementation of such policies should be flexible in a rural context.

Possible growth sectors

There were a number of references to particular sectors that may offer the potential for growth going forward, including in relation to job creation. There was a call for NPF4 to set out a framework to stimulate and encourage job creation and income generation, including to replace jobs lost in the fossil fuel-based industries. It was reported that recent research indicates that only 28% of Scottish employment is in key sectors^[17] and it was suggested, therefore, that inclusive growth is more likely to arise in the non key sectors.

Specific suggestions included focusing on the low carbon, green economy. The potential of low carbon sector businesses was highlighted, including in relation to world-class training and research facilities. In addition to the wider green economy, there were specific references to NPF4 offering the opportunity to create a positive development context for renewables which can help in promoting investment in renewable technologies and development on the ground. It was suggested that affordable renewable power could transform Scotland's economy in the medium and long term, with a specific proposal for the establishment of a new social enterprise, such as The People's Energy Company.

The revolution in renewable energy, and other technologies and innovations, was seen as providing a significant opportunity to address occupational segregation in STEM sectors in Scotland and to integrate women's equality issues throughout its approach to tackling climate change.

Other sectors identified of offering potential for growth included:

• Agriculture and food industries, including the potential identification of agri-business corridors. There was also reference to potential to focus on producing climate-resilient crops and sustainable packaging.
• Leisure and tourism, including by benefiting from peoples' preference to reduce the distances they travel and the potential increase in popularity of 'staycations'. The potential of the sustainable tourism and eco-tourism markets was highlighted, along with the need to ensure the necessary infrastructure is in place to support sustainable tourism.
• The blue economy, including a focus on sustainable marine and coastal development. Connections were made to offshore renewables, aquaculture, and coastal infrastructure and to the potential for NPF4 to support these areas.
• The construction sector, including around tackling the skills shortage across the county to undertake energy efficiency measures and retrofitting. Also, addressing the pipeline and skill set needed to benefit from modern methods of construction such as sustainable modern methods of offsite construction.
• The engineering, architecture and design industries, including because of the opportunity to innovate and produce energy efficient buildings.
• Education and research and development, including by making the critical links between education, research and development, innovation and the public sector.
• The emerging space industry.