St. Modwen and Savills have urged the UK government to reform the planning system to boost the logistics industry and facilitate the construction of more modern and sustainable warehousing.
They argue that historic land constraints have suppressed demand for industrial space by 29% in the past decade, causing supply chain inefficiencies. They calculate that annual demand for new logistics space exceeds the delivery of new units by 58%.
Logistics companies are faced with a shortage of space, making it difficult for them to operate. They want the government to help by making it easier for logistics companies to build new facilities.
The logistics firm and the property adviser have recommended five key policy changes to enable the planning system to better facilitate the freight and logistics sector's growth.
The government should create a national policy that recognizes industrial and logistics facilities as critical infrastructure, recognizing the wider economic benefits of logistics developments, such as job creation and indirect tax revenue during planning.
It should also use the Savills/St. Modwen Logistics "Suppressed Demand" Model in its national planning practice guidance to assess future demand for logistics space.
The government should require local authorities set five-year targets for the amount of land they will make available for employment use, just as they do for residential land.
Another proposal is to bring back a level of planning that looks at the big picture, beyond just local housing and transportation needs, thus helping local authorities to make better decisions about new logistics developments.
Finally, the government should create a training program to help local government planners, elected officials, and planning inspectors learn more about commercial markets. This would help them to understand the needs of the freight and logistics sector and make better decisions about planning applications for new logistics facilities.
Together, the five recommended policy changes could make the planning system more effective in supporting the growth of the freight and logistics sector.
St. Modwen and Savills highlight that the logistics sector is the fastest-growing commercial sector in the UK, the number of people employed has increased by 30% in the past ten years, compared to 15% for the economy as a whole, while wages are higher than average in all regions of England.
Overall, the logistics sector now contributes £238 bn (€273 bn) to the UK economy each year, which is 14% of total GVA.
