The real planning problem starts after permission is granted

At a speaking event a few weeks ago, I was asked what my thoughts were on the Planning and Infrastructure Act 2025. My honest answer is that it is too soon to tell. Yes, the provisions are intended to make major projects obtain planning permission more quickly, but as I learned when I worked at London Underground, “custom and practice” may come up with a different result than what was intended on paper.

We will just have to wait and see how custom and practice are changed to adapt to the new provisions, or if the industry around achieving planning permissions will continue on as they have always done because it is in their self-interest to do so.

This is not the planning issue that causes me concern though. What concerns me is the timing of when we achieve planning permission combined with the timing of when we procure our contractors and how this combination results in the worst of all worlds in terms of cost and time of project delivery.

It is very logical to try to spend as little money as possible on a project prior to achieving planning consent. I’ve seen this on every project that I’ve worked on – from smaller office buildings to East West Rail.

Going through a procurement process to appoint contractors this early in the process will inevitably increase cost prior to receiving planning approval, and there are risks around committing to one contractor this early in the process and being beholden to their delivery approach if it is included in the planning approval.

Contractors also deliver projects in different ways, so it is also logical for clients who haven’t yet appointed their contractor to seek the most expansive planning approval possible to allow for different delivery options once contractors are appointed.

Yet the typical timing of the appointment of contractors – after the planning approval is achieved – is probably the worst and most costly time for a project.

The contractor is provided with the maximum set of conditions the client can achieve and is allowed to use all of it — and so the cost of the project is also at its maximum

This is because the contractor is provided with the maximum set of conditions that the client can achieve and is allowed to use all of it. What I haven’t seen happen after a contractor is appointed is a contractual mechanism that effectively ‘trims the sails’ of the planning approval and which incentivises the contractor to reduce in practice the conditions within the approval: the land take, lorry movements, working hours, waste disposal, etc. Therefore, the cost of the project is also at its maximum if the contractor is procured at this stage in the project lifecycle.

To avoid this, the options for clients are to either a) procure the contractor early in the process or b) ensure that contract awarded post-approval incentivises the contractor to utilise as little as the conditions included in the approval as possible.

Neither of these things are straightforward to deliver but must be considered in order to minimise the overall cost, time and stakeholder impact of projects. If the contractor is procured earlier, the client should create a contractual structure that ensures that they can achieve value for money and aren’t held hostage by the contractor’s delivery methodology that is approved in the planning process. This is obviously easier said than done, not least because it will require more upfront funding.

For public sector projects of national importance – arguably everything that is a Nationally Significant Infrastructure Project should fall under this category – it could be justifiable to ‘spend to save’ with the expectation that the planning approval will be more specific to the actual delivery and therefore reduce the construction costs over the long run. The other element will be to ensure that contractors are continuing to provide value for money under the terms of their contract.

A robust ‘should cost’ model and live benchmarking could mitigate the concerns about contractors taking advantage of the situation. However, convincing HM Treasury to provide more money upfront may prove the ultimate block to this approach.

If we want different solutions, we can’t just rely on the act to fix it for us. We also need to adjust our custom and practice and find better ways to deliver

The alternative – to incentivise contractors to minimise planning conditions – may be more achievable, at least in the short term. This approach could either be delivered through a one stage design and build competition, where the contractors would be effectively pricing how much of the planning conditions that they need to use into their price. For a two stage/ECI process, the contract would require terms to be included that provides bonuses to the contractor to reduce the planning conditions as part of developing their design and ultimate cost.

I may be biased because I think that doing less to achieve an outcome is always the best idea but getting a grip of how the planning process is used with and by contractors surely must have a positive impact on the ultimate delivered project. If we want different solutions, we can’t just rely on the new planning act to fix it for us. We also need to adjust our custom and practice and find some better ways to deliver.

Beth West is a former commercial director of HS2, head of development at Landsec and chief executive of East West Rail. She is now founder and director of Navigate Advisory