Freeports: concept requires planning policy and law reform

Francis Tyrrell and Robbie Owen were commenting after Pinsent Masons, the law firm behind Out-Law, submitted its response to the UK government's consultations on its freeports policy, which closed to further feedback on 13 July. The government has expressed its intention to establish up to 10 freeports across the UK. It wants freeports to be "national hubs for global trade and investment across the UK", for them to "promote regeneration and job creation" and become "hotbeds for innovation".

In its response, Pinsent Masons outlined its support for the concept of freeports, which are designated areas commonly situated in and around existing ports, including airports and railfreight hubs, that have their own customs and tax rules. Pinsent Masons identified opportunities to change planning law and policy to best support the government's ambitions for freeports and ports more generally.

Tyrrell said: "The government's consultation predates the coronavirus crisis in the UK and the planning reforms being considered now in England to drive economic recovery from the pandemic. For freeports, a lot of what the government is keen to do can be achieved by tweaking the existing planning rules and regulations rather than through wholesale reform."

Tyrrell said that one area where targeted reforms would be effective is to existing rules on permitted development rights. A 'permitted development' is development for which planning permission is automatically granted, subject to the development meeting the conditions set by legislation. Ports and airports each have their own permitted development rights.

"Taking and expanding the existing permitted development rights for ports would provide an ideal basis for freeports and sustainable port and port-related development more generally," Tyrrell said. "Expanding these rights and, more importantly giving real clarity to the areas to which the rights apply would make it easier for designated 'port' and 'freeport land' to be put into a wider range of uses, such as for manufacturing or processing, that do not have to have a direct relationship with shipping or passengers. This would help facilitate the more universal freeport concept."

Robbie Owen suggested that a zonal approach to planning issues, now being championed by ministers as a key part of planning reform generally, could be trialled to support freeports, in addition to reforming permitted development rights. This could be achieved through the much greater use of local development orders (LDOs) to put in place a broad range of permitted uses within each freeport without the need for further authorisation for specified development within that zone. But to achieve this, the LDO regime needs some targeted reforms, including allowing developers to apply to the local planning authority for an LDO, he said.

Tyrrell also advocated a rationalisation of the number of initial assessments developers around ports often have to carry out. Presently, freeport or port development may need to carry out strategic environmental assessment, environmental impact assessment, habitats regulations appropriate assessment; health impact assessment; equalities impact assessment; and water framework directive assessments.

"As the UK leaves the EU, it is an opportune time to look at that plethora of different assessments that must be carried out and carried out according to varying requirements; they could be streamlined and rationalised to achieve the same outcome, but via one more efficient and integrated process," Tyrrell said. "This would be likely to speed up the relevant pre-application process and also lead to costs reductions."

Owen also said further thought needs to be given to who should be allowed to promote freeports. Many of the UK's largest ports are privately owned, so it should not be left solely to public bodies such as combined authorities and local authorities, or local enterprise partnerships to make applications to the government on where freeports should be located, he said.

Owen said: "Bids led by private enterprise should be encouraged and in some cases could help deliver freeports more quickly than if they were led by local enterprise partnerships, which in any event is a concept confined to England."

Owen said that with freeports central to the government's infrastructure investment strategy and post-Brexit trade policy, it was imperative that government provided would-be bidders with sufficient time to formulate detailed bids to ensure the freeports are located in the right locations across the UK.

"The consultation has thrown up a myriad of details that government will need to take a view on in settling its freeports policy and before inviting bids, so that freeports will deliver the most significant benefit to the UK," Owen said. "The most effective models for partnership between private and public sector and local economic partners to design and submit applications will need to be settled. Other issues include addressing the competition law consequences of introducing freeports, whether multi-site freeports will be possible, the governance of freeports and their legal architecture and how freeports might be allowed organically to expand or contract over time."