The proportion of industry figures who believe that the economic climate for development will improve over the next 12 months has doubled since our last market review appeared at the back end of 2011.
At that time, just under a quarter of the consultants responding to the relevant Planning Consultancy Survey question agreed that the economic climate for development would improve in 2012. This September, as the sector looked ahead to 2013, 80 out of 173 firms - 46 per cent - supported this proposition. The proportion that disagreed has halved from 31 to 16 per cent, with the remaining 38 per cent expressing no opinion either way.
Among other positive findings, 48 per cent of respondents believe their planning team will grow in the next 12 months, up from 42 per cent in the 2011 survey, against just three per cent who expect shrinkage. One factor could be that even more consultants - 74 per cent compared with 70 per cent last year - are now convinced that the government's ongoing planning reforms will lead to more appeals over the next two years, with only eight per cent predicting that the reforms will lessen the appeals workload.
Market value of the various planning consultancies 2011/12 (PDF)
Changes in value of planning fee income by market sector 2011-13 (PDF)
The findings also suggest that many consultants and their clients are finding the system no easier to navigate. Just over half expect anti-development councils to use the Community Infrastructure Levy as a way to block housebuilding. Forty-five per cent believe that neighbourhood planning has increased residents' ability to resist unwelcome development. A massive 84 per cent are convinced that local authorities' information and validation demands for planning applications are too onerous.
"Consultants help manage change for clients, so planning reform is good for business in the short term," says James Fennell, managing director at Nathaniel Lichfield & Partners, who expects his practice to grow at all levels next year.
"By the time the government has implemented all the reforms to simplify the planning process, we hope the economy will be back on a sustained growth trajectory."
Ian Tant, senior partner at Barton Willmore, says more local authorities are taking a pragmatic approach to development, looking to help move projects forward. "However, while many councils have got the message about the crucial importance of growth and delivery, too many seem to believe that the localism agenda has given them the right to resist growth and restrict development," he warns.
Roger Hepher, head of Savills' planning and regeneration team, agrees that the planning reforms are tending to generate more work. "This is partly because clients perceive that, under the presumption in favour of sustainable development, there may be a better chance of success than in the past. Also, the system has become more complex and diverse, so the case for using consultants who are knowledgeable about a particular area is stronger than ever."
Predictions for separate market sectors, based on averages of individual firms' estimates of how the demand for certain services is changing, also provide grounds for optimism. Our figures suggest that business growth exceeded consultants' expectations a year ago in leisure development, mixed-use brownfield projects, transport planning, health facilities and heritage conservation. On the other hand, two big earners - retail and town centre work and input into district-level plans - failed to grow as fast as envisaged during 2011/12.
Consultants are now noticeably more optimistic than they were a year ago about prospects for growth in nearly every sector. In particular, the consensus suggests that planning activity on mixed-use and residential schemes will grow by seven or eight per cent in 2012-13. The top infrastructure performer in 2012/13 could be energy planning, where consultants foresee a ten per rise in business.
Firms are also expecting growth of around ten per cent in plan-making activity at the district and neighbourhood level. But sub-regional planning activity is forecast to remain in the doldrums, despite the pressure exerted by the Localism Act 2011's duty to cooperate on cross-boundary strategic issues. Regional planning is the only sector predicted to show a drop in earnings this year.
As ever, the overall size of the planning market is hard to estimate. Aggregate earnings for the 135 firms declaring their planning fee income for 2011/12 was just over £404 million, compared with a total of some £372 million claimed by 87 firms last year. Those 135 firms employed 1,699 chartered town planners this September.
This year, 81 firms detailed their earnings in each market sector. The aggregated results illustrate the relative value of each sector (see graphic above). On this count, consultancy advice on development projects remains the main activity, making up 55 per cent of all earnings. Meanwhile, infrastructure projects' share grew from 31 to 35 per cent of earnings from 2010/11 to 2011/12. The energy market alone saw fees increase by 43 per cent over the same period.
Reported income from the plans and studies categories fell markedly, from £33.5 million in 2010/11 to £18 million last year. Consultants attribute this to factors such as a lack of council resources and a growing feeling among developers and landowners that going straight to appeal will produce quicker dividends than drawn-out involvement in plan formulation.
Yet 66 per cent of consultants remain concerned that delays in local plan production are a major constraint on development, only a slight dip on last year's figure of 69 per cent. "We are still seeing local authorities refusing planning permission on prematurity grounds. But if recent appeal decisions are anything to go by, the Planning Inspectorate will not easily be convinced by arguments that new policy is just round the corner and development should wait for that," says WYG Planning & Environment managing director Tim Holden.
Turley Associates chief executive Rob Lucas says plan-making remains complex and has become even less accessible to the public. Despite government rhetoric on the value of neighbourhood planning, he says, it is being used to hold back development. He adds: "The National Planning Policy Framework's world of positive, proactive development plans is still a long way off in practice."
About the survey
The Planning Consultancy Survey 2012 was conducted during September on behalf of Planning by market research and communications company Camargue Group. Consultants were invited to respond via the Survey Monkey website or by returning a paper questionnaire. Questions covered staffing and fee levels, estimates of growth or decline in key market sectors and views on a set of 23 current practice issues. The survey received responses from a record 210 practices, 57 more than last year, employing 2,091 chartered town planners.