You remember the 1980s: big hair, De Lorean cars, awful music and the free-fire enterprise zones that gave us London Docklands. Now Labour is going to bring back at least one of the above, with its idea for creating areas where the usual planning process is suspended. But will they work this time around?
For years, businesses have complained that the planning system is too cumbersome, slow and costly. The Labour government, desperate to appear business-friendly, has come up with two new types of business zone that mimic the Thatcherite "enterprise zones". The aim is to speed up the planning process and encourage regeneration.

Local authorities will be able to relax planning rules within areas designated "business planning zones". And 2000 enterprise zones will work alongside these BPZs on a smaller scale; these will offer tax credits to start-up businesses and the remove stamp duty.

The changes – which are part of the Planning and Compulsory Purchase Bill, due to become law later this year – are known in government phraseology as "enabling". This means that local and regional authorities can choose whether to use the provisions, rather than being forced to.

The most famous example of a Thatcherite EZ is Docklands in London, which brought huge amounts of investment into one of the poorest areas in the capital and generated a business district that now rivals the City of London. Manchester's Salford Quays was another deprived area revived through an EZ designation (see "Enterprise zones, old and new", below).

The planning system has long been under fire from business lobby groups for being too lengthy and costly. Chancellor Gordon Brown hopes the new zones, especially the BPZs, will kick-start a similar regeneration spurt in other rundown areas, while winning him some friends among the business community. And he certainly has the CBI's support.

"We're in favour of zoning, in principle at least," says Ian Jeffries, the CBI's senior policy adviser. "It is important for local authorities to support the BPZs – where they are located is vital to their success. A lot will rest on how the BPZs are implemented by local authorities. How to ensure architectural quality will also be a key detail, and the length of time the zones run will be a key issue."

Planning minister Lord Rooker is well aware of the CBI's concerns, and he has stressed that local authorities will be expected to issue tight parameters. "BPZs are not planning free-for-alls," he said in December 2002, announcing the concept. "There will be tight constraints on the types of business, types of developments and types of places they will happen. They are designed to get the right development in the right place."

There will only be one or two zones per region; a total of up to 16 around the country. The local authority will decide the size of zones, the terms by which firms can move in and the types of buildings that can be erected. "A local authority would identify an area for regeneration or to cluster certain industries – for example, high-tech – together," says a spokesperson from the Office of the Deputy Prime Minister. "They then take the proposal to the public and say, 'If you want to site a specific industry here, you don't have to go through the whole long, complex planning criteria'.

It could be used for certain types of business, certain types of company, certain buildings that stick to specific sizes and designs."

But many people doubt the wisdom of using BPZs to regenerate or draw investment into rundown areas. Liz Peace, chief executive of the British Property Federation, thinks they will only work for massive out-of-town business and science parks.

"I'm not sure they'll be the panacea that people think," she says. "You couldn't have a BPZ in a city centre. They'll be very valuable in building a uniform business park, but I can't see how you would have one for anything more variable than that. Each city centre building has individual needs and design parameters, and a BPZ will only work where there can be a degree of sameness."

She also thinks BPZs need to incorporate financial incentives – like Thatcher's EZs – if they are to be attractive to firms considering relocation. "I cannot believe a company will be drawn to a site because it is a BPZ," she says. "It would need much more tax incentives, grants and so on."

The new zones aren't the only change the government has in store for planners. The wide-reaching transformation includes the abolition of county-wide planning authorities, with more power devolved to the local level, and the creation of new regional spatial strategies for larger-scale planning. The RSSs will be drawn up by quangos, rather than elected bodies, although they could be taken over by regional assemblies in the future.

All the changes aim to simplify the planning process and reduce delays; the government has also promised an extra £350m over the next three years to speed up planning decision-making.

But Jane Chevis, chair of the Local Government Association planning executive, is concerned that the structure will remove local people's say. "A planning system that has no direct democratic mechanism for people to express concerns over plans that affect them on a county or region-wide basis is a recipe for bad and unpopular development," she says. "People will not understand why their counties have been left out of the planning process despite their key role in balancing the social, economic and environmental well-being of their area."

And the LGA doesn't think businesses actually want zoning. "We don't think they are attractive to business and there's little support among local authorities for them," an LGA spokesperson says. "We're concerned they won't speed up the planning process. And can they really deliver high quality development?"

Quality certainly does not seem to be the main aim; timescale is what is important. The idea, it is rumoured, was dreamed up by a government minister feeling frustrated at the tendency of local planning authorities to delay large companies' plans, deterring them from setting up shop in the UK. Cambridge, supposedly a haven for high-tech firms, has often been cited as an example – several large firms decided to move elsewhere in Europe after enduring lengthy delays on planning permission for new premises in Cambridge.

So will BPZs help cities like Cambridge? David Adamson, director of estates at Cambridge University, is cautiously optimistic. "We think these zones will be helpful and there's already a strong need for change," he says. "We have a thriving high-tech industry in Cambridge, and we anticipate these zones will help firms being spun off from university research establishments."

But Adamson thinks the proposed removal of county-wide planning could be a mistake, and says large cities could suffer. "We're concerned about how planning will be done for the greater Cambridge area," he says. "If the planning exercised by counties isn't going to happen, we'd be nervous about what's going to replace it."

Supporters of the current planning system don't see the need for change. Architect Tim Evans, a partner at Sheppard Robson, fears that new zones could actually put more strain on planners.

"I think it would require as much, if not more, work from the planning officers to ensure the architectural standards are met," he said in a debate at international property fair MIPIM in France last month. "The whole idea lacks credibility. It may be just an opportunity for developers to have less interference in their projects. I can't see it working successfully – either it won't achieve the simplification it aims for, or it will give developers too much freedom."

More funding for the existing system is far more important than new ideas like zones, according to the Town and Country Planning Association. "We support the need to speed up decision-making, but we don't believe BPZs will help," TCPA director Gideon Amos said. "It would be far better to adequately resource local planning authorities so that they can meet their targets. Planning control is not an obstruction in the way suggested [by the government] and does not need to be removed. If the government wants a high-quality planning system that provides for the needs of businesses, it has to be prepared to pay for it."

So could Cambridge be the new Docklands? The government seems to hope so. Whether the people and planners of Cambridge will welcome the changes, however, remains to be seen.

Jargon buster

RSS Regional spatial strategy. A document prepared every 10 years that sets out the planning aims for that region for the next decade. Drawn up by a government-appointed quango. LDD Local development documents. These are documents prepared by the local authority that set out their planning aims. Statement of development principles These replace planning permission. When permission is sought for a new development, the local authority must draw up a statement setting out their requirements and restrictions for the scheme.

Enterprise zones, old and new

Thatcher wanted to replicate the dynamics of a Hong Kong-style economy, with weakened or abolished regulations covering areas such as health, safety and planning. Businesses moving to her enterprise zones were given 100% allowances for corporation and income tax, for expenditure on industrial and commercial buildings; exemption from industrial training levies; exemption from the non-domestic rate on industrial and commercial buildings; and priority on planning applications. The advantages lasted for a 10-year fixed period. Over 30 EZs were set up from 1981 to 1996, the most famous of which was Docklands in London. Others included Salford Quays in Manchester, Swansea, Wakefield, Tyneside, Belfast, Londonderry, Invergordon, north-west Kent, Middlesbrough, and north-east Lancashire. The government’s new EZs will differ from their 1980s precursors “where property subsidies diverted activity from one area to another”, according to chancellor Gordon Brown. Instead, the new EZs will “encourage home-grown economic activity by cutting the cost of starting up, investing, hiring, training, and managing the payroll”. Businesses operating in these areas will be exempt from stamp duty on business property purchases, and will receive help with investment through a tax credit providing £25 of public money for every £100 invested. Extra funding for small businesses will come in the shape of £50m extra given to the Phoenix Fund, which encourages business in deprived areas, and advice from the Small Business Service worth £2000.

The future of planning – according to the Planning and Compulsory Purchase bill

Changes to the planning system structure:
  • removal of the county structures, leaving a two-tier system of local and regional bodies
  • regional spatial strategies will be drawn up by new unelected regional planning bodies
  • business planning zones will be introduced – one or two per region
  • the compulsory purchase system will be updated, extending loss payments to businesses
Local authorities will have to:
  • draw up new local development documents, containing core policies, development proposals and a clear map
  • complete a clear statement of community involvement on how they intend to involve people in drawing up plans and considering applications
  • draw up statements of development principles, which must outline conditions of the planning permission for a proposed development
  • local authorities will be able to use the statement to indicate the design and quality standards they expect from the development
The bill aims to reduce abuses of the system by:
  • removing the right to repeat applications and “twin tracking” (the same application being submitted twice)
  • reducing planning permission from five to three years
  • abolishing automatic permission renewal (so developers cannot sit on permission for years on end)
  • offering guidance on how to make planning negotiations more transparent and simple
  • improving consultation for people affected by planning decisions