Planning, economy, place: literature review

Review of the publications and case studies regarding how planning can support the economy, and

how the economy can support creating great places.

4 Research Findings

4.1 This section summarises the research findings based upon the literature review and illustrated by the case studies. The research findings articulate the role of planning in supporting and shaping economic development, investment and place making. The research may inform work being undertaken to support planning reform in Scotland and the evidence base for future National Planning Frameworks. It may also help in formulating new approaches to measure added value through planning and judge successful outcomes. The research findings presented below are the author's interpretation of the work presented in this report.

4.2 The literature review considered more than fifty high quality references on planning, economy, place - and the inter-relationships between those.

4.3 The research found that planning, economy and place are often considered separately. At their most reductive:

  • planning is seen merely as a regulatory activity;
  • economy is recognised as evidence-based (even if disputed); and,
  • place is seen as architecture and urban design, rather than function or feel.

Each, however, has far greater scope and interaction than those narrow perspectives would suggest.

4.4 Some authors note that the planning legislation in 1947 provided tools, but not a defined role. Others presume a core function for planning, which is then tested for effectiveness. This is often against economic yardsticks rather than wider considerations.

4.5 Planning has been adaptable to changes in external objectives. From time-to-time these objectives may include: regulation or deregulation; market intervention or a laissez-faire approach; planning merely as land use allocations or in delivery; place-making prioritised or submerged; and a focus on achieving narrow economic targets, or on long run, triple bottom-line sustainable economic growth. Current Scottish Planning Policy specifically defines the objective of planning as to contribute to sustainable development.

4.6 The neoclassical consensus[25] since the early 1900s has given economics the substance and gloss of quantitative, evidence-based research. The rise of neo-liberalism during and after the 1980s has further elevated economics' preferential position. A countervailing trend since the 2008 Global Financial Crisis may however be challenging that consensus, particularly where market-led development alone is difficult to achieve or is inadequate to deliver wider outcomes.

4.7 Irrespective of the political landscape, land and property markets are, due to their spatial nature, particularly prone to failures between the individual site and wider interests. These effects includes: externalities, or costs which someone else bears; under-provision of public goods (spaces, services and infrastructure); and lost opportunities. Despite these known effects, the standard economics approach focuses on narrow development and economic outputs. As shown in Section 2, planning might claim a role in supporting a very approximate £10 billion in annual economic output from development and related sectors.

4.8 This approach however makes planning binary; where planning consent is 'good' or 'bad' according to individual perspective, and the planner is merely the referee. Thus planning, through its adaptability, regulatory focus, reduced interventions[26], and agency for investment, may have conspired with neoliberal markets in this 'good cop / bad cop' view of its role and purpose. At its simplest level, a narrow market approach fails to fully understand what it is that planning is allocating. That approach views planning as the arbiter of short term transactional values, rather than long term land use costs and benefits.

4.9 A more considered economics perspective of planning's regulatory role is that it creates certainty and promotes financial value and wider benefits, but also brings economic and social costs, some of which can be redressed by planning. However, even this wider recognition fails to provide a consistent approach, or cost-benefit or socio-economic analyses of the long run implications of land use. Thus the evidence base for planning's wider roles and relationships is thin.

4.10 Moreover, by relegating planning to a merely regulatory role, its potential to shape markets is overlooked. Land economics literature typically views planning as a 'day one' allocation of scarce land resources, to be exploited later and by others; rather than planning having the potential to reach further and more widely into markets, or indeed to stimulate Adams & Watkins "plan-shaped markets".

4.11 The increasing policy focus on place post-1990 might suggest this is a recent idea, perhaps in response to urban decline and post-industrial regeneration. On the contrary, place has strong antecedents in Howard, Geddes et al[27]. 'Place' is, though, a less formalised discipline than economics. To become evidence-based, 'place' borrows methodologies from economics, social and environmental sciences. This lack of an empirical underpinning, and the rise of market economics post-1980, have potentially made it difficult for place-making to be heard above the clamour for economic growth, and the skewed view of planning as a passive consenting process rather than central to place-making.

4.12 Place and economy increasingly meet in socio-economic approaches to understanding and assessing planning and development outcomes[28]. Planning's aim to deliver sustainable economic growth requires understanding of the wider and potential future effects of plans, policies and decisions, while recognising the inherent conflicts and complexities. Such sophisticated approaches in the planning system are emergent rather than established[29].

4.13 To date, more sophisticated approaches have been common in major areas of public policy such as health, transport and education, but not in planning. Business cases and monitoring and evaluation programmes may selectively inform major public and third sector-funded projects. The effects of economy upon place are however little researched, other than in selected case studies and in rhetorical analyses which measure place-based economic outputs.

4.14 The crux, in a market economy, is to demonstrate that a sophisticated approach does not diminish economic growth, but is intended to achieve a better cost-benefit balance and thus support continuing long run growth and resilience. In this regard, planning is only recently and gradually rediscovering its scope, reach, and complexity. Notwithstanding that complexity, a role is likely to remain for quick-and-accessible tools to inform the conversation, such as headline economic impact assessments and the Place Standard.

4.15 Four very different case studies illustrate planning's roles in economy and place. Each involves planning in shaping and directing markets, and in regeneration areas the provision of targeted, catalytic investment, such as transport infrastructure or site clearance and remediation. The 'reach' of planning into the delivery (rather than simply regulation) of economy and place outcomes varies by project needs. Clyde Gateway required substantial strategic planning and public investment to bring a vast regeneration area to market for investment and development. The Pennywell regeneration required planning and site creation by the public sector for private sector-led delivery of a new community. Borders Railway required planning and early pump-priming around new infrastructure, followed by more localised planning and delivery. Stromness required detailed planning direction to enable both public and private sector investment. Thus, 'plan-shaped' markets are not a simplistic concept, but vary (and change) according to the degree of stimulus and direction required - indeed they vary according to the economy, and the place, in question. The case studies could be further interrogated and supplemented to support a more structured triple bottom line approach to the values and outcomes of planning.


4.16 The research indicates that there can be a positive relationship between planning, economy and place - but it is neither linear nor automatic. A passive, regulatory role for planning as allocator and arbiter of land use can support the delivery of major development outputs. However, that on its own is inadequate to engage with the complex and dynamic nature of markets, and deal with both the positive benefits and the negative impacts upon others' costs, and upon places and place making.

4.17 To fully support sustainable economic growth, planning requires to take a sophisticated approach, including a broad and active role within markets, reaching into and shaping how economies progress and how markets are engaged to help support and deliver places.


Email: Eric Dawson

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