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27/06/2016

Brexit: Reaction

Words: Laura Edgar

Following the vote by the UK to leave the European Union, some industry professionals have welcomed the news while others warn that the extrication process will be long and expensive.

The UK voted by a 51.9 per cent majority to leave European Union (EU), with 48.1 per cent voting to remain.

Following the result, Prime Minister David Cameron announced that he would step down by October, before the Conservative Party Conference in Birmingham.

RTPI president Phil Williams said that at this stage “it is not clear, what impact the decision will have on planning related EU law and directives that have been transposed into national legislation”.

Despite the referendum result, “the planning profession will continue to be international in its outlook”.


Read more from the RTPI here.


Here, The Planner has collated reaction from the industry to the vote.

Business must play a stabilising role in an unstable environment

 

Melanie Leech, chief executive, British Property Federation, said the effect of the result has been immediate.

“We are already seeing market turbulence and a fall in the pound. The priority for the government and the Bank of England must now be to stabilise the position and maintain confidence in the UK.”

As no nation has ever left the EU, said Patrick Flaherty, chief executive, UK & Ireland, AECOM, the long-term impact could not be accurately forecast at this time.

“These are unchartered waters made even more uncertain by the prime minister’s announced resignation and the leadership election that will follow. As a country we must navigate wisely. Business must support government as it leads the country through this period of change.”

Government must maintain focus on national priorities in housing and infrastructure, in the face of shrinking funding

 

Leech said the negotiation process would be “long and complicated” with “many unknowns”.

"Our priority,” she continued, “is that the government maintains focus on existing national priorities such as housing and that it makes decisions on major infrastructure projects, such as airport capacity and maintaining momentum around HS2, swiftly."

Flaherty agreed. He said focus must remain on energy security and energy independence, as well as progressing the UK’s ambitious infrastructure pipeline.

“Schemes such as HS2, Crossrail 2 and the Northern Powerhouse programme are vital to the country’s ability to compete on a global stage, which is more crucial than ever due to this referendum result,” said Flaherty.

Mark Granger, chief executive at Carter Jonas, said: “The potential loss of access to funding for major infrastructure and regeneration projects in the near future will be of great concern to the planning and development sectors.”

Granger explained that EU funding supports some of the UK’s poorest regions, and a number of significant infrastructure projects such as Crossrail.

He warned: “There is the potential that the UK may now lose this support, which could place additional pressure on the public sector to find alternative funding.”

UK property will remain an attractive investment

 

Granger said: “Recent volatility in the bond and equities markets reinforce the case for real estate investment, as property continues to provide long-term income stability and the ability to add value through active asset management. Looking forward, we firmly believe that fundamentals will continue to drive the UK property market. The UK has one of the largest and most sophisticated property markets in the world and because of this it should remain a magnet for global occupiers and investors.”

However, Granger suggested that demand for high-end residential and commercial property could weaken – at least in the short term.

“The high-end [residential] market may be impacted by weaker demand from senior executives and international buyers in the short term, however, a fall in sterling could make UK property an attractive proposition to foreign investors.”

EU environmental legislation is at risk, and the fragmentation of UK legal systems means there are compliance challenges ahead

 

Martha Grekos, head of London planning and infrastructure at Irwin Mitchell, said it is possible that different parts of the UK would diverge even further than they do currently. This is because, she explained, “if any part of the UK wanted to make any legislative changes, these would need to be made by each of the individual constituent parts of the UK. This in turn could make compliance more difficult for businesses operating in more than one part of the UK".

Both Angus Walker, partner at Bircham Dyson Bell LLP, and Grekos said UK domestic legislation and agreements signed in the name of the UK would remain. Grekos referred to Kyoto Protocol while Walker cited the Aarhus Convention.

Grekos said: “The true impact of planning and environmental law and policy will only become clear once negotiations are under way and the future legal relationship with the EU will govern the extent to which the UK must continue to comply with EU environmental laws."

Speaking to The Planner, Walker said legally nothing would happen for a while. Economically though, it is a bit different.

He said a huge amount of uncertainty surrounds large schemes, particularly housing. “It is important for certainty that the government makes a formal statement as soon as possible.”

Time to plan and deliver a new future

 

Tony Pierce, director of Urbisnet Consulting, previously put the case for Brexit in The Planner.

He said: “Planners can now release their imaginative and creative sides and start to plan for a new political landscape where everything is open to question. How exciting is that!”

Pierce said it is now time to plan and deliver a new future.

“We must not lose touch with those we plan for, as we have done in recent years. We should remember, as planners, designers and property people, who we ultimately serve and that clients may pay our wages, but it is the public who hold the power, as they should in a democracy.”

‘Brace yourselves’

 

Like Walker and Grekos, Riki Therivel, visiting professor, research associate, Oxford Brookes University, highlighted that much of the UK’s environmental and planning legislation is based on European directives.

However, “Brexit does not mean that all of that is jettisoned, but it does mean that in time this will all be reconsidered”, she told The Planner.

“The Local Plans Expert Group has already recommended a substantial weakening of England’s requirements for strategic environmental assessment. The Air Quality Directive’s standards are not being met in many areas, nor are those of the Water Framework Directive in over half of water bodies in England and Wales: one can imagine the legal knives sharpening against all of the implementing legislation.”

Therivel believes that implementing Brexit would be a “long, expensive and centrally led process”.

She questioned where that money would come from, suggesting that planning department budgets could “suffer further” to pay for this.

“That said, Brexit may bring in a new era of greater certainty regarding future population, decreased need for new homes, and consequently less pressure on greenfield sites... but how will house builders respond?

“The only thing that is certain is that the coming years will bring many changes to planning practice and environmental policy. We need to brace ourselves.”

Cannot afford house building to slow

 

The EU has always provided a “strong framework” for the built environment, energy and climate change sectors, said Hugh Ellis, interim chief executive, Town and Country Planning Association (TCPA).

“This challenge will now fall to a new government to ensure that we have the right safeguards in place to protect the environment, prevent flooding, and ensure that we are building sustainable, high-quality places for future generations.”

The TCPA, Ellis continued, would continue to champion the “very best of international practice, showing how visionary placemaking can transform people’s lives”.

Friday saw “the first share price ripples towards the housing and construction sector”, he said.

“We cannot afford for house building to slow as we continue to face the biggest housing crisis of a generation."

Planning system won't significantly change

 

David Bainbridge, planning partner at Bidwells, said the result is “not what most commentators in the development industry wanted” because of the uncertainty separation brings for investment decisions.

But Bainbridge said the result would not “significantly change the planning system as the plan-led system but importantly the emphasis on delivery under policy guidance in the National Planning Policy Framework is set to remain. If anything, the result might strengthen the government's policy of support for house building”.

He said the imbalance between housing supply and housing demand would continue while the economy remains strong.

“Confidence needs to hold up in order to redress the imbalance and reach towards delivery of over 200,000 new homes each year.

“Interesting times ahead for the development industry at a time when strong visible leadership is needed,” Bainbridge concluded.

Vital local government part of conversation

 

The Local Government Association (LGA) said local government would be “central in bring communities together” following the referendum result.

“Councils in England need a seat around the table when decisions are taken over how to replace EU laws as part of the UK’s exit negotiations. It is vital that local government is part of the team.

“EU laws and regulations impact on many council services, such as waste, employment, health and safety, consumer protection and trading and environmental standards.”

There cannot be, said the LGA, an assumption that power over these services is “simply transferred from Brussels to Westminster”.

“If services are delivered locally, then the power over how to run them should rest locally too. Decades of centralised control over funding and services has distanced our residents from the decisions that affect their everyday lives. With greater control in our areas we can improve services and save money.”

Communities in England have been allocated £5.3 billion of EU regeneration funding up to 2020, said the association, which represents councils in England and Wales.

“It is important for the government to guarantee it will protect this vital funding to avoid essential growth-boosting projects stalling and local economies across England being stifled.”

Every reason to be optimisitc that it will be business as usual

 

Viral Desai, senior planner, Barton Willmore, told The Planner it is too soon to speculate how the future of young planners and the planning system will be impact by Brexit.

“We have taken a leap into the dark, and the impact to EIA and SEA regulations could remain unknown for years to come. In the immediate term, property and construction markets will weather some volatility, but the current housing crisis and need for new homes remain a constant. For that reason, we have every reason to be optimistic that to a great extent business will continue as usual.”


Image credit | iStock

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