30 May 2013

New planning rules give high street developers ‘free rein’

New planning rules enforced today could see pubs and betting shops operating under the same roof, critics say.

New planning rules on could see Britain's high streets being over-run by betting shops and payday loan companies say critics (Image: Reuters)

Under new rules business owners and developers no longer have to apply for planning permission for changing the use of a commercial space.

Councils have warned that the new rules risk Britain’s high streets being “over-run” by betting shops and payday loan companies.

But the government insists it is cutting red tape in a bid to return empty buildings to productive use on the recommendation of retail guru Mary Portas.

Until now if shop owners and developers wanted to change a commercial space from, for example, a retail shop to a food shop, they automatically required planning permission.

From today however, they will no longer have to apply for planning permission for a change of use.

‘Free rein’

The Local Government Association (LGA) which represents more than 370 councils in England and Wales, said the reforms will give developers a “free rein” to convert offices into flats, gift shops into payday loan companies and greengrocers into betting shops.

The changes risk “draining the life from high streets”, it warned.

While it is currently illegal for betting shops to operate from within a pub, and gambling laws ban the sale of alcohol in betting shops, the new rules could allow a developer to split the two under one roof.

The Department for Communities and Local Government told Channel 4 News that gambling laws “tightly regulate the sub-division of premises”. But the LGA said it was unclear if the law would be able to block it under the new rules.

Councils do have limited powers to block applications. A Local Authority may remove planning rights if it feels that the development would be harmful to the character of an area, under Article 4 of the Town and Country Planning Order of 1995.

However, the Article 4 process requires a year’s notice and is mainly used to protect conservation areas. It is only used in “exceptional circumstances” and requires the council to pay compensation to the business that has been unable to set up as a result.

Hilary Benn, Labour’s Shadow Communities and Local Government Secretary, said: “These changes, which have been pushed through without parliamentary scrutiny, weaken the ability of local communities and councils to shape their high streets and local economy in the way they want.

“Instead of making it easier for pay day lenders and betting shops to open up in pubs and other premises, the government should be giving more power to communities to decide when enough is enough.”

The LGA is calling on the government to let local areas decide for themselves where they should relax the planning rules. “This would make it easier for new shops and businesses to open up where they are wanted and needed, while protecting local democracy and reducing the risk of unintended consequences,” it said.

‘Retail crisis’

On Wednesday a report warned that a fifth of Britain’s high street shops could close within the next five years, with the country facing a “serious retail crisis”.

Indeed, in 2012 payday loan companies were the fastest growing high street shops, up 20 per cent on the previous year, according to analysis by Price Waterhouse Coopers (PwC) and the Local Data Company.

Pound shops and pawnbrokers followed closely behind with a 13 per cent increase, while the more traditional high street shops continued to disappear.

Computer games shops suffered the most, down 45 per cent on the previous year, while card and poster shops, and health food shops were down 23 per cent and 25 per cent respectively. Clothes shops, recruitment agencies and banks were also among the biggest casualties.

The payday loan industry is currently being targeted by the Office of Fair Trading (OFT), which in March gave 50 payday lenders a 12-week deadline to improve their behaviour or risk losing their trading licences.

In June, it is expected to announce whether the payday market will be referred for investigation by the Competition Commission.

On Tuesday, a Citizens Advice report said payday lenders were “out of control”, urging the OFT to ban irresponsible firms.