Based on the evidence on past and future trends, we have come to the following conclusions to guide the development of our recommendations:
1. Evidence suggests that we do not have enough industrial land in London.
Rapidly rising land values and extremely low vacancy rates are signs that London’s
industrial land market is overheating. There is demand for industrial premises but the market often doesn’t provide the right space, in the right location and at the right price. This is creating problems London does not want to have, which we go into in subsequent points.
2. Further reductions in industrial land will impact on London’s economic success and its ability to respond flexibly to changing patterns in society.
As set out earlier in the paper, London’s industrial land supports a broad range of activities that keep London ticking – from the construction of new homes to utilities, and from waste remediation to the restocking of supermarket shelves. Many industrial businesses are core to London’s innovation economy and offer a wide range of jobs, some of which are highly skilled.
Industrial land hosts strategic activities that must happen within the city’s boundaries – and those often have specific requirements, making it impossible or unviable for them to relocate. For example, utility networks need stations within the city, and high end manufacturers rely on having a large pool of skilled workers locally. The scarcity of land means it is more difficult to accommodate these activities in London.
Some industrial activities need very specific conditions to operate – such as large sites or proximity to transport links – that make it virtually impossible to re-locate within the city, let alone within any given local authority. Other light industrial activities work well in mixed use neighbourhoods, though many will also have operational requirements, such as freight and deliveries.
3. Industrial land is definitely poorly understood. We need a more co-ordinated voice to speak out for its economic contribution to London
Because industrial activities operate out of view from most Londoners, the need for industrial land feels remote to their daily experience of the city. In raw political terms, there are more votes in housing that industrial land.
Some industrial occupiers feel misunderstood by public opinion and local authorities – and there is still a legacy view that industrial activities are predominantly dirty, noisy and polluting, or generally constitute an unproductive use of land.
Many industrial occupiers also say their voices have been crowded out from the public debate – either by other economic sectors, or because the land use pressures are seen as essentially a London problem. This can play against industrial land use and users in planning decisions.
Decision making about land use will therefore require a broader and better understanding of the value of industrial land to the city, and to help with this, a stronger voice from businesses that use and rely on industrial premises.
4. There are some types of industrial activity which have to be within London’s boundaries and these should be ‘protected’ in some way, but others could work well elsewhere.
Many of the remaining industrial activities remaining in the city need to locate here – because they provide essential services to Londoners and support the city’s economy, or rely on the skills of London workers. But other activities may be ‘legacy’ industrial activities, which are located in London because they started here, but could operate elsewhere, though this depends on the cost of relocation.
5. Employment opportunities are as important as housing provision – and the latter should not, in policy terms, be allowed to trump the former.
Londoners needs places to work as well as to live – and industrial activities make up for 12 per cent London’s jobs, according to our estimate in section 3. As we’ve shown, industrial land encompasses wide variety of jobs across the capital, at all skill levels.
6. Sustainability implications of moving industrial land outside London also matter.
Moving industrial activities further out of the city increases miles driven by freight and delivery vehicles, and increases their carbon and air pollution impacts. Boosting reuse and repair activities will also require land within the city. London will therefore need industrial land to meet net zero carbon targets.
7. There needs to be some sort of ‘intervention’ to achieve the outcomes set out above – it is for further debate whether this should comprise protection of some sort for some or all types of industrial land or whether it is better to do it by means of light-touch interventions – and whether those interventions come at national, London, or Borough level – or a combination of all three.
8. Whatever the intervention, the London Plan should always determine overall land use strategy. To enable this to happen, changes to the London Plan process would be needed:
- The government’s role in approving the London Plan should be limited, for example, to a small number of nationally important issues
- The London Plan process should be more nimble, to allow for a more responsive industrial land strategy.
There needs to be a citywide strategy on industrial land supply: release of industrial land in one local authority impacts on demand in others – and many industrial uses serve more than just a local function.
But any industrial land strategy will need to be responsive – the last iteration of the London Plan took five years from initiation to publication. During such a long period of delay it is very difficult for policies to react to changing circumstances.
On top of this, London’s industrial land use strategy should not be overruled by central government, expect for a limited number of matters of national importance, since London politicians are better placed to represent the interests of the city, its residents and workers.
9. ‘Industrial land’ is too broad a classification – intervention should include introducing more granular definitions for industrial land designation (see 4. above). Designation could be based on criticality, neighbourliness or other criteria yet to be determined.
As shown earlier, there is a huge diversity in the activities taking place industrial land, but this is generally not reflected in the designations that local authorities make, which are usually ‘blanket’ designations. There are a few exceptions, for example in safeguarding waste disposal sites or wharves, but generally designation is not based on local and citywide needs, site constraints and opportunities. This makes it particularly difficult for planning authorities to encourage the provision of types of industrial land that are most needed locally, to encourage the best use of the existing land, and to manage potential conflicts with nearby uses.
On top of this, London-wide targets are useful but they don’t say much about local need and local context. For example, freight consolidation requires small to medium size spaces in dense areas for last mile deliveries, while bigger sheds are needed at the London fringe. Understanding what industrial uses add most economic, social or environmental value to different London areas would help planning authorities decide where to protect, release or add industrial land, and of what kind.
The ability of industrial activities to operate within the city also differs. Some activities work well near homes, shops or offices, while other industrial processes can’t mix with other uses – for example because of their hours of operation or the traffic they generate. An index of neighbourliness would help with land use decisions, could encourage more mixed use, or make sure industrial processes are not jeopardised by development nearby.
It is up for discussion whether boroughs should have an increased role in specifying these different requirements – as doing this well will require increased levels of expertise to work out a more complex industrial land usage policy.
10. Intensification of industrial land use offers a supplement to protection but it is expensive and there would need to be financial support from the government or the GLA to facilitate intensification of existing sites.
Intensification should be encouraged – we have heard from an industrial land developer that intensification of industrial land is still a rarity in London, though it is happening more. 38 There are examples of countries where it is more common that London could learn from. The city will need policies that drive investment in intensification, but that are tempered with realistic ambitions given the complexity and cost of intensifying use in some instances.
Policies could be introduced to encourage intensification of industrial land to provide more capacity, for example through a rebate on development taxes or business rates, or through public investment to assemble land or de-risk intensified developments. This would create some additional capacity over time and would also help upgrade building stock.
11. London will need to coordinate its industrial land policies with neighbouring authorities in the Wider South East.
London is already supported by industrial activities outside its boundary, many of which are located elsewhere in the Wider South East.
On the one hand, further reductions in industrial land in London would add pressure onto neighbouring authorities, where land use is even more constrained by Green Belt protections. On the other hand, protecting and providing industrial land within London will not ease pressures by much if surrounding authorities are pursuing opposite strategies – so cooperation across the London boundary will be key.
The Commissioners welcome views on these initial conclusions as we move towards our final policy recommendations. Please use this form to feedback: