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17 October 2014updated 09 Sep 2021 8:21am

Eric Pickles’ planning changes are putting economic recovery at risk

Businesses risk eviction, higher rents and no space to grow if government changes to planning policies are approved.

By Nicky Gavron and James Governor

Four years ago the Prime Minister proclaimed his desire to help make East London one of the world’s great technology centres. We have made significant progress since then, but now proposed changes to the planning system threaten to put this growth at risk. East London is one of the best places for technology companies in the world but we face significant competition from global cities such as Berlin and should be building on our current momentum.

Whilst large technology companies are important, ambitious and entrepreneurial start-ups and SMEs form the foundation of any technology hub. They bring the ideas, skills and drive for innovation which push the boundaries. Perhaps most importantly, small companies create jobs.

The introduction of ‘Permitted Development Rights’ which are being consulted on by the Department for Communities and Local Government would mean that offices and workspaces could be converted into flats overnight without the need for any planning permission. This would have a devastating effect on small businesses in areas like Tech City where housing property values far outstrip those of commercial buildings, heavily incentivising property owners to convert to residential.  Councils already have the powers to allow conversions where appropriate– but this also means the ability to protect office space, ensure good standards of housing and encourage balanced mixes of dwellings and commercial space alongside the infrastructure they rely on. We strongly believe that affordable workspace is just as important as affordable housing in creating a sustainable, balanced economy.

Permitted Development takes that right out of councils’ hands and removes their ability to help build the ecosystems and areas where people want to live, work and succeed.

Some boroughs where Permitted Development Rights were trialled have already lost a significant amount of their office space. This has, in many cases, seen businesses evicted, while others face an uphill challenge to find affordable office space. 

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Tech City is just one of the areas under threat from these changes. Through the work of the local businesses, local councils and Central Government, the ecosystem which has built up over the last decade in East London has significantly regenerated the area, stimulating thousands of new high tech jobs but also making it vastly more attractive to residential development. 

Whilst we recognise the need for new housing in the capital this cannot come at the expense of jobs and London’s economic recovery. During the trial phase of the new planning regimen areas like Tech City, were granted an exemption but this is now set to be removed as the policy is made permanent. Having seen the impact on other areas we are clear that Old Street roundabout and the Shoreditch area more broadly would be at serious risk of redevelopment as housing. The cluster is beginning to spread to other areas such as Haggerston, but affordable workspace is still in limited supply in these areas. 

Reform of the planning system is welcome but Permitted Development threatens to undermine the ability of companies, particularly start-ups and SMEs, often supported by coworking spaces, incubators and accelerators, to find the affordable facilities they need to set-up, expand and create jobs. For that reason, and given his personal commitment to the technology sector, we call upon the Prime Minister to support current exemptions, and help us to grow the economy, create jobs and opportunities.

Nicky Gavron AM is the London Assembly Labour Group Spokesperson on Planning; James Governor is a businessman who runs Shoreditch Village Hall and Shoreditch Works