Selected Issues Papers

Construction Planning Reforms for Growth and Investment: United Kingdom

By Agnese Carella, Pragyan Deb, Nihal Haider

July 24, 2024

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Agnese Carella, Pragyan Deb, and Nihal Haider. Construction Planning Reforms for Growth and Investment: United Kingdom, (USA: International Monetary Fund, 2024) accessed October 12, 2024

Summary

The UK construction planning system is overly stringent and the localized and discretionary system of decision-making makes it highly unpredictable. It hinders new construction (both residential and commercial) and infrastructure projects, restricting labor mobility (as workers stay trapped in suboptimal jobs due to unaffordable housing in areas with better prospects). It also raises investment costs for businesses, who often endure long and uncertain wait times or are forced to relocate to suboptimal locations. International and domestic experience suggests that a concerted overhaul of the system is needed, focusing on systemic reforms that reduce discretionary decision-making in granting permissions. While this is politically difficult, tangible progress is possible around a few key areas: (i) broader geographic and rules-based decision-making for business and large residential developments to reduce uncertainty for investors; (ii) digitalized and standardized plans at the local level which are, additionally, binding for designated growth areas; (iii) careful review of scope to release Green Belt land of little environmental or amenity value near stations with easy access to major cities; and (iv) targeted incentives (to overcome new builds resistance) and resources to local authorities (including skilled staff to facilitate compliance with new environmental requirements)

Subject: Housing, Housing prices, Infrastructure, Labor, Labor mobility, National accounts, Prices, Private investment

Keywords: Construction planning reform, Global, Housing, Housing prices, Infrastructure, Infrastructure project, Investment, Labor mobility, Planning, Potential Growth, Private investment, Reforms for growth, Skilled staff, UK construction

Publication Details

  • Pages:

    14

  • Volume:

    ---

  • DOI:

    ---

  • Issue:

    ---

  • Series:

    Selected Issues Paper No. 2024/031

  • Stock No:

    SIPEA2024031

  • ISBN:

    9798400284687

  • ISSN:

    2958-7875