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The New Runway Debacle

The new runway debacle – a prime example of planning paralysis

Just after Theresa May became Prime Minister, Nudge Factory published a blog predicting some of the initiatives she would take in her first 100 days in office. One of these predictions was that there would finally be an announcement on a new runway.

As it turns out, we were off by 8 days.

Today the Government has announced that they are supporting a third runway at Heathrow. This follows decades of indecision about where to place a new runway, despite an overwhelming recognition that expansion of capacity was essential. In fact, it is fully 13 years since a Labour government published a White Paper backing a new runway at Heathrow. So, to finally have a decision is extremely welcome. (Although, as a Croydon-based firm, we are a little disappointed that Gatwick has not also been given the go-ahead as it would undoubtedly boost the Croydon economy, can be built much more quickly, and would cost less than Heathrow).

However, along with the announcement we also learned that there will be another year of consultation before MPs get to vote on the package; there are already legal challenges being prepared from various sources for various reasons; there are going to be ongoing protests from local residents, environmental campaigners and local politicians; and no doubt many other initiatives designed to slow down or overturn the decision. In short, we can be sure that there will be more delays and that actual work on a new runway will not commence for some time, possibly years. It is unlikely that any new runway capacity would be operational before 2025, according to most estimates, and even that is probably optimistic given all the delays we have seen up until this point.

We offer a couple of thoughts.

Firstly, this is yet another sad indictment of the planning system in the UK. Major projects continue to be delayed, with decisions postponed due to difficult politics. The Government knew for years that we needed to replace the energy produced by our aging nuclear reactors and yet is only this year a deal (much derided in the end) was signed for Hinckley Point. It will be many more years before a new plant comes on line. Fracking is another example: a technology that has been proven in other the parts of the world is still being held up by political opposition, protest, and legal challenges. Even smaller scale housing schemes are affected by political considerations, delayed and routinely rejected despite the acknowledged housing crisis around the country. We need an urgent overhaul of our planning system, both for nationally significant infrastructure projects and for housing, to simplify and speed up the process and actually get viable schemes underway as soon as possible.

Secondly, given that we know infrastructure planning decisions take so long to get from drawing board to development in the UK, we need to start planning for even more additional runways right now. Where a case can be made for extra airport capacity, and where the economic conditions are right, the Government should look favourably on granting expansion plans as soon as possible. This probably means at least a new runway at Gatwick, plus one more in the South East at either Luton or Stanstead, and maybe even growth at Manchester and/or Birmingham. We cannot allow the UK to fall behind other nations, especially in this post-Brexit environment.

One possible answer to the above issues is the National Infrastructure Commission, first announced by George Osborne in October 2015, set-up to advise the government on key infrastructure projects that will unlock potential around the country: it has already published reports recommending Crossrail 2 in London, High Speed 3 in the North, and the potential for ‘Smart Power’ energy networks to better balance supply and demand. Lord Andrew Adonis, current Interim Chair of the NIC, today welcomed the Heathrow announcement, saying it is “a long overdue step in the right direction.”

However, this National Infrastructure Commission as envisioned by Philip Hammond is different to that of Osborne. Instead of being fully independent by statute, it will become an executive agency in January 2017 – with an autonomous budget, but with less influence and importance that originally set out. Lord Adonis – respected across the political specturm on infrastructure matters – will not continue as its Chair. It is currently undertaking a ‘call for ideas’ from business and other experts to set its focus for 2017 and beyond, and it remainds to be seen whether it’s infrastructure recommendations will be able to avoid the political pitfalls that have afflicted Heathrow.

Another policy solution that is coming forward – one that we think is more positive – are the changes to Compulsory Purchase Order powers proposed in the Neighbourhood Planning Bill, which underwent its Second Reading in the House of Commons on October 10th. DCLG states that it wants to make the CPO process “clearer, fairer and faster”; in particular, the Bill will better codify how compensation will be agreed. Currently, this is based on over 100 years’ worth of statute and case law that is often contradictory, and the new Bill will set out a simpler framework to identify the market value of compensation. The Royal Town Planning Institute and the British Property Federation, among others, have welcomed these changes, which will help large infrastructure projects get off the ground more quickly than previously. Indeed, the Bill includes a clause which will give Transport for London and the Greater London Authority the power to make single, overarching Compulsory Purchase Orders for transport and regeneration projects, where currently they have to split projects into different parts causing delays and higher costs. The new powers will allow the Mayor of London to deliver large infrastructure projects (like the NIC-recommened Crossrail 2) at a faster rate, and it is not a stretch to imagine that other city-region Mayors and devolved authorities may receive similar powers as part of futuer devolution deals.

 

If you are interested in a more detailed briefing and to hear more about our Public Affairs Practice, please contact David Park (Partner) at david@nudgefactory.co.uk

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