Planners fear stores competition test could overload regime

Planners have voiced fears that proposals to make the Office of Fair Trading (OFT) a statutory consultee on larger supermarket schemes could create a new quasi-planning bureaucracy which would struggle to cope with the number of applications it would need to deal with.

That is the concern of the Royal Town Planning Institute in its immediate reaction to the Competition Commission's recommendations following publication of the watchdog's final report into competition in the grocery sector.

The report included a recommendation that local planning authorities (LPAs) should be required to consult the OFT on whether proposed supermarket developments with more than 1,000sq m of net sales floor space should be given the go-ahead. The assessment would be carried out based on the number of competing retail outlets within a ten-minute drive of the proposed location.

The institute has also complained that the assessment test is outdated and questioned whether the planning system should be used to judge competition issues, arguing this could undermine the inherent fairness of the planning regime.

RTPI policy director Rynd Smith said: "I'm not sure the Competition Commission has fully considered just how much extra work the OFT would have to take on. Retailers, local authorities and local residents rightly expect swift decisions on planning applications and the OFT has the potential to become a blockage in the system. I seriously doubt that it currently has the capacity to carry out its proposed extra function."

On the competition issue Smith said: "The planning system is about what and where, not who. There are some weaknesses in the Needs Test but overall it has been an effective way of defending the diversity and vibrancy of town centres and should be maintained.

"We are not opposed to the introduction of measures which take into account the impact development might have on retail diversity but we must be extremely careful not to undermine the inherent fairness of the planning system."

However, the institute has welcomed the watchdog's well-trailed proposals to end the practice of restrictive covenants which prevent land agreements and restrict entry by competitors.

A Communities and Local Government spokesperson said: "We have made absolutely clear we are committed to protecting small shops and the vitality of town centres.

"That's why we are introducing a new stronger impact test that will mean councils can refuse any application that has a negative impact on the diversity of the high street, helping to protect our small shops at the heart of local communities.

"The current needs test is failing small shop owners through its crude pass or fail criteria. We need a policy that controls new development and judges what the positive or negative impact for small shop owners and local communities would be. We will be publishing the detail of these new proposals in the summer for consultation."

On the proposed competition test the spokesperson said: "Our planning policy for town centres already promotes competition and consumer choice. We will carefully consider the Commission's final recommendations including the implications for business, local authorities, consumers and communities before formally responding."

Access the Competition Commission Groceries Market Investigation final report and appendices

Read the Royal Town Planning Institute press release

Roger Milne

1 May 2008