Does the Use Classes Order go far enough?

It is no secret that the government wants to update the planning system and, while major reform has stalled, it has been busy over the past few years taking steps to modernise the regime. The introduction of use class E, for example, has created an environment which could transform the high street, allowing developers to turn offices to restaurants and shops to gyms without the need for planning permission. However, as the ways in which we use space continue to evolve, have the changes to the Use Classes Order done enough to support emerging uses?  Deliveries and data Despite the breadth of use class E, there are still many uses that do not neatly fall into any of the current use classes. One such use, which came into its own during lockdowns, is “dark kitchens”. A dark kitchen is essentially a production unit for restaurants who use the purpose-built kitchen to cook and then sell food on a delivery-only basis. As customers never visit the site, a variety of different buildings can be utilised for these purposes including warehouses and portacabins. Location is less critical so operators can target areas with cheaper rents.  However, setting up a dark kitchen is also a planning dark art. While it is clear that the use isn’t as a restaurant, akin to the old use class A3, it isn’t immediately apparent what it is. Indeed, local authorities are taking different views as to how to treat dark kitchens for planning purposes. Camden Council, for example, considers the use to be sui generis (being a use of its own kind which does not fall within a particular class), whereas Nottingham City Council has included commercial kitchens within class B1c (which now falls within class E(g)(iii) (light industrial)).  Data centres face a similar issue. Why doesn’t the update to the Use Classes Order specifically recognise data centres, given the ongoing debates on how they should be treated and their increasing prevalence? At the end of 2019, one agent suggested that data centres were “in the top 10 sectors to invest in, following logistics facilities and residential-based asset classes”.  Data centres are sometimes classified as class B8 (storage and distribution) as they are principally used for the electronic storage of data. However, as they operate in a greatly different way to many traditional storage warehouses, some local authorities consider them class E (having previously viewed them as akin to office or industrial operations), or even sui generis.  Another emerging use without a clear home within the Use Classes Order, is last-mile logistics, which covers the final part of a product’s delivery to the customer. This use has been driven by a rise in internet shopping and the utilisation of local fulfilment centres by large online retailers. Last-mile logistics also covers click-and-collect services, collection points and business-to-business deliveries.  As with data centres, last-mile logistics is sometimes classed as storage and distribution within use class B8. However, the traditional warehouse locations and specifications often don’t meet the demands of being last mile (which ideally are placed near consumers) and many also have a retail element which could put them within class E (as shops or industrial operations) or sui generis. Sui generis use, although potentially attractive for a local authority, is often less attractive to developers who face uncertainty when establishing new sites and who prefer the flexibility of belonging to a use class.  Putting properties to use Questions over use classes aren’t just part of an academic debate. As well as causing uncertainty, something which developers are keen to avoid, use classes impact asset management. The value of an asset is intrinsically linked to what it can be used for. Ultimately, a property which can only be used for limited purposes is less marketable. This may mean that landlords are reluctant to allow their properties to be put into uses without a use class home, which can hinder the evolution of these emerging uses. Where a landlord is willing to accommodate a new use, it would be wise to consider applying for multiuse permissions which would allow greater flexibility.  Thinking ahead  While the introduction of class E has created potentially more fluidity between traditional high street uses, it has done nothing to provide more clarity on many emerging uses. It seems that these less traditional uses have been largely ignored by the government, despite their increasing prevalence.  It seems likely that the position will become more complex as the way in which we use space changes and new uses come to the fore. Every sector is adapting to changing demand and exploring new ways of working, such as the shift in retail, with many major brands opening up customer experience centres in place of traditional stores.  Use class E may have bought some time with added flexibility, but how long will it be before the high street outgrows the current system? And how should we be planning for these uses which don’t fit neatly within the system? It is no longer sufficient for local authorities to simply consider traditional uses when preparing policy. Although it is hard to predict how the world will work in five or 10 years’ time, it seems clear that our planning system needs further revision to ensure it can adapt to this emerging landscape.  Rosie Shields is an associate in the planning team at Hogan Lovells