Gove Is Back, Planning Reform Is Off And Investment Zones Might Be Out As New UK Government Takes Shape

Michael Gove is back in charge at the Department for Levelling Up, and No 10 Downing Street has signalled the end of efforts to reform the planning system.

A raft of changes and new ministerial appointments following the installation of Rishi Sunak as new prime minister could also spell the end of investment zones, the deregulated and tax-beneficial areas the government of his predecessor, Liz Truss, hoped would revive UK growth.

The end of planning reform came Wednesday afternoon when a statement from Downing Street confirmed the idea was now shelved.

“There are no plans for the supply-side reforms as we previously discussed," a No 10 spokesman said. "That's not to say there won't be elements that the chancellor may or may not wish to come forward with."

Truss regime proposals to speed planning for major developments would have struggled to make it through parliament in any case, representing the third attempt at major planning reform since 2020. None survived contact with political reality.

Specialists told Bisnow last month that employing more planners would unblock the planning system more effectively than changes to the rules.

The return of Gove, who left the Department of Levelling Up in July as the Boris Johnson premiership collapsed, reignites interest in the idea of regional growth.

The Truss administration gave short shrift to proposals to level up the UK regions, becalming legislation introduced by Gove. His return will revive efforts to invest in Manchester, Birmingham and Yorkshire, likely to the delight of the property industry.

With planning reform junked, investment zones could be the next to go as the Sunak government clears the decks of its short-lived predecessor's legacy.

Since the new zones were announced six weeks ago, a series of documents posted on the government website by the Truss administration suggested a gradual tightening of the rules and a shrinking of its potential benefits.

First, supporting documentation was published that watered down the list of planning rules likely to be eased inside investment zones. This kept green belt rules, forbidding development on urban-adjacent land.

Soon after, a second iteration suggested the tax benefits would be limited, too.

“The government will set a high bar for establishing investment zones,” the document said, explaining it wanted high-impact locations that “demonstrate value for money, minimise displacement and bring forward new development.”

Bids for investment zone status needed to show the economic impact over 10 years to 2032, a hurdle to many projects. And enthusiasm was visibly waning by the middle of October when a government announcement said there would be no further rounds of applications for investment zone status.

The British Property Federation welcomed Gove’s appointment as secretary of state, casting it as a return to an established policy agenda after an unwelcome interlude.

“This summer we lost vital time on delivering on the Government’s agenda and urgently need a consistent and steady hand on the key issues of the day – housing supply, regeneration and net zero – which are all critical to the UK’s growth ambitions and international competitiveness,” British Property Federation chief executive Melanie Leech said.