Industrial Capacity

The London Plan (Spatial Development Strategy for Greater London) Draft Supplementary Planning Guidance

September 2003

Industrial Capacity
The London Plan (Spatial Development Strategy for Greater London) Draft Supplementary Planning Guidance

September 2003

Greater London Authority September 2003 Published by: Greater London Authority City Hall The Queen’s Walk London SE1 2AA internet: enquiries: minicom: ISBN: 020 7983 4100 020 7983 4458 1 85261 501X

Cover photograph: Adam Hinton This publication is printed on recycled paper Copies of this draft Supplementary Planning Guidance are available from or by calling 020 7983 4100. How to give your views The Mayor’s draft Supplementary Planning Guidance on Industrial Capacity is published for consultation and your comments are invited. Please reference your comments to the relevant paragraphs in the draft SPG. Responses must be received by 5pm 2 January 2004. They should be sent to: Ken Livingstone Mayor of London (Industrial Capacity) Greater London Authority FREEPOST 15799 London SE1 2BR Or by email to with ‘Industrial Capacity’ as the subject.

The Mayor’s Supplementary Planning Guidance

Industrial Capacity

SUMMARY......................................................................................................................2 1 2 3 4 5 INTRODUCTION............................................................................................................... 4 BACKGROUND................................................................................................................. 4 POLICY CONTEXT............................................................................................................ 6 SPG OBJECTIVES ............................................................................................................. 8 CHANGING INDUSTRIAL DEMAND AND THE PLAN, MONITOR AND MANAGE APPROACH .................................................................................................................... 10 6 THE STRATEGIC EMPLOYMENT LOCATIONS FRAMEWORK AND OTHER INDUSTRIAL PROVISION .................................................................................................................... 13 7 INDUSTRIAL CAPACITY AND MIXED USE DEVELOPMENT........................................... 18 8 QUALITY AND VARIETY OF INDUSTRIAL CAPACITY .................................................... 19 9 SMALL INDUSTRIAL ENTERPRISES............................................................................... 21 10 STORAGE AND DISTRIBUTION...................................................................................... 23 ANNEXES......................................................................................................................24 Annex 1: INDUSTRIAL LAND DEMAND AND SUPPLY TRENDS ........................................... 24 Annex 2: STRATEGIC EMPLOYMENT LOCATIONS FRAMEWORK ........................................ 29 Annex 3: REFERENCES.......................................................................................................... 32 Index of Draft SPG Implementation Points Policy 3B.6 of the DLP sets out the general approach to provision for industry:.....................6 SPG 1 – Industrial Capacity and Demand: the Plan, Monitor and Manage Approach ............12 SPG 2 – Strategic Employment Locations Framework ...........................................................13 SPG 3 – Locally Significant Industrial Sites............................................................................14 SPG 4 – Other Industrial Sites ...............................................................................................15 SPG 5 – Industrial Capacity and Mixed Use Development .....................................................19 SPG 6 – Quality and Variety of Industrial Capacity................................................................21 SPG 7 – Small Industrial Enterprises ......................................................................................22 SPG 8 – Storage and distribution ..........................................................................................23


Industrial Capacity

The Mayor’s Supplementary Planning Guidance

SUMMARY The long term decline in London’s manufacturing industries is abating, falling from an annual average of –24,000 jobs over the last 30 years to an expected –5,000 jobs pa to 2016. A modest resurgence in warehousing employment is anticipated, reversing the historic –1,500 jobs pa decline to an increase of nearly 1,000 pa. While the Standard Industrial Classes for manufacturing and wholesale distribution employment do not cover all potential occupiers of industrial land, used with other indicators they provide a reasonable proxy for industrial demand. On past trends, these together suggest that there could be ‘churning’ annual demand for 55 ha of industrial land pa set in the context of a long term reduction in demand approximating to 30 – 50 ha pa. In line with PPG 12 this Supplementary Planning Guidance (SPG) does not propose new policies but supplements those of the draft London Plan (DLP) to: • ensure that there is an adequate stock of industrial employment capacity to meet the future needs of different types of industry in different parts of London, including that for good quality and affordable space. • plan, monitor and manage the release of genuinely surplus industrial land so that it can better contribute to strategic and local planning objectives, especially those to provide more housing and particularly affordable housing. In appropriate locations where it can contribute to town centre renewal, offices, leisure and retailing as well as high density housing will be appropriate. However, out- of- centre retail and leisure uses will continue to be strongly resisted. There are some 7,000 ha of industrial land in London. Subject to regular review of changing demand and supply, this SPG and the DLP reaffirm the effective historic policy to sustain the strategic reservoir of industrial capacity (4,400 ha) in designated Strategic Employment Locations (SELs). More than two thirds of this will be protected as Preferred Industrial Locations (PILs) to meet the needs of industries which, to be competitive, do not place a high premium on an attractive environment, though they may need infrastructure and other sorts of improvements. The remainder will be protected in Industrial Business Parks (IBPs) offering a higher quality environment. Drawing on a range of DLP and national policies, the SPG encourages owners and occupiers of industrial land, as well as the LDA, boroughs and other relevant agencies, to manage and invest in this capacity to meet the changing needs of different types of industry. To support this, mixed use, higher density re-development of some Strategic Employment Locations close to town centres and public transport nodes is encouraged providing it does not compromise DLP policy 3B.6 and capacity to meet London’s future industrial needs. To ensure that proposed alterations to national policy on industrial land use change are effectively coordinated in London, the SPG also provides guidance to Boroughs on identifying in Sub Regional Development Frameworks those SELs, or parts of SELs, which could be consolidated through the first review of the London Plan. Neither intensification nor consolidation should lead to a net loss of capacity to accommodate industrial employment or compromise strategic and local housing policies. Such development must fulfil stringent design criteria to secure a harmonious mix of activities and a safe, attractive environment for all uses. The SPG supports boroughs in identifying and protecting locally important industrial areas outside the SEL framework providing their UDPs demonstrate that this is justified by demand. Most of the change in the industrial stock will therefore take place among the 2

The Mayor’s Supplementary Planning Guidance

Industrial Capacity

remaining sites outside the SEL and UDP frameworks. The SPG recognises that cumulatively these will still be strategically as well as locally important for industry. It therefore provides geographically sensitive, strategic, local and market based guidelines to be refined by boroughs to manage the supply of these sites in the light of local circumstances and demands. The SPG also provides guidance on enhancing the quality and variety of industrial provision and to meet the specific needs of small firms and warehousing.


Industrial Capacity

The Mayor’s Supplementary Planning Guidance

1 1.1

INTRODUCTION The draft London Plan (DLP) recognises that though manufacturing industry and wholesale distribution are relatively small sectors, they have a significant role in the London economy. They are also experiencing considerable change. The DLP outlines the contribution these sectors can make to achieve its wider objectives. In Policy 3B.6 it promotes Strategic Employment Locations (SELs) as London’s strategic reservoir of industrial development capacity to accommodate industry and other activities with similar land use needs and requires boroughs to manage the protection, release or enhancement of sites outside the SELs. Drawing on the procedures and substantive issues addressed by national guidance, this SPG details the broad policies and principles in the DLP which bear on provision for industry but does not propose new policy. The national procedural context for the SPG is set by PPG12 and the more substantive, national policy context by PPGs 1, 3, 4, 11, RPG 9 and Circular 1/2000 as well as the wider urban renaissance agenda outlined in ‘Our Towns and Cities: the Future’ and the ‘Sustainable Communities – Delivering Through Planning’. An SPG is a material planning consideration. It will inform the Mayor’s planning decisions and should be taken into account by boroughs and other agencies concerned with the use and enhancement of London’s industrial land. BACKGROUND Historically, industrial capacity was used mainly to accommodate the manufacturing and wholesale distribution sectors. In the last 30 years manufacturing has changed from providing over a fifth of London’s employment to the point where it accounts now for only 7%. This loss of nearly three quarters of a million jobs was the single most important reason why, until relatively recently, overall employment in London declined. However, by the mid 1990s the decline in manufacturing employment had abated. While long term growth is not expected in the future, neither is it anticipated that the historic rate of decline will resume. Consultants Volterra forecast a loss of 82,000 jobs from the 2000 total of 328,0001. The anticipated rate of decline in manufacturing is due not so much to an expected renaissance in the sector as a reflection of there now being so fewer jobs to be lost. The reasons for the historic decline reflect macro economic factors exacerbated in London by higher costs and competing land uses. However, the process of change also entailed some restructuring among the industries which still find London a competitive location. This is partly because of accessibility to a regional market which is uniquely large, wealthy and compact. It also reflects innovation, changing techniques and specialisation as industries move towards the production of higher value goods or become more closely associated with services e.g. through an emphasis on research, catering or the leisure market. Traditional distinctions between production, assembly, distribution and office-based activities in the manufacturing sector are breaking down. ‘Only about six in ten of those employed in London’s manufacturing sector work at establishments whose main function is manufacturing activity’2. The flexibility in the Use Classes and General Development Orders supports this. In the past such flexibility gave rise to concern that land would change from low value industrial to high value office uses to


2 2.1




The Mayor’s Supplementary Planning Guidance

Industrial Capacity

the extent that industrial capacity in London would be compromised. However, while this was once the case in some areas, more sustained sources of loss have been to retailing and housing. 2.4 Productivity in manufacturing is now above that in some service industries, its contribution to London’s GDP is disproportionately high (11% of the total, though this is partly a reflection of the way in which statistics are recorded) and it is the second most important source of exports from the capital3. The Economic Development Strategy highlights a range of sub-sectors with particular growth potential and needs (see paragraph 8.2 of this SPG). Although a smaller employer than manufacturing, wholesale distribution has been less susceptible to decline. Employment increased slightly from the mid 1990s to 275,000 in 2000 and is forecast to expand by 14,000 by 2016. The nature of wholesale distribution has changed considerably over the last 30 years as logistics have become more sophisticated in response to global trends and to meet the needs of the large and complex London market. The industry is particularly affected by customer concerns for ‘just in time delivery’ and those of the wider public for the environmental impact of freight distribution. Historic policy approaches to warehouse provision have been coloured by its employment densities. However, some wholesale distribution employment densities can approach those of some manufacturing industries, especially when associated with related assembly, packaging or office employment. More importantly, distribution serving a city region of over seven million people performs a vital economic function as well as providing modern, economically sustainable employment opportunities. In the right location and especially when associated with appropriate transport management and inter-modal transfer arrangements, it can also contribute to broader sustainability objectives. Guidelines on the relationship between transport and freight are set out in the Transport Strategy as well as the DLP. Supplementary Planning Guidance, complementary to this SPG and informing DLP Policy 3.C3 will be produced to address the land use and environmental implications of new and improved transport provision. This SPG will also complement the Mayor’s proposals to safeguard wharves on the River Thames4. Definitional issues are raised in addressing both the demand and supply of industrial land. On the land supply side, the B1(b), B1(c), B2 and B8 Use Classes do not include all potential users of industrial land. Conversely, some of these classes can accommodate what are essentially office based rather than production activities. Moreover, the General Development Order allows changes between these uses and ‘pure offices’ (B1(a)). The Strategic Employment Locations framework outlined in Annex 2 and Figure 1 seeks to accommodate industries of different types, recognizing that they will have different spatial and environmental requirements. On the demand side, the manufacturing and wholesale distribution Standard Industrial Categories (SICs) exclude activities which occupy industrial land. Conversely, they include others which are highly unlikely to occupy such land e.g. larger firms in central London classified as manufacturing but which are probably headquarters offices. The consensus among the demand side studies cited in paragraph 2.6 of Annex 1 suggests that these SICs are reasonable, pragmatic proxies for overall industrial demand.





Industrial Capacity

The Mayor’s Supplementary Planning Guidance


Background justification for this SPG, including some material which updates that which informed preparation of the draft London Plan, is set out in Annex 1. POLICY CONTEXT Dated, national guidance (PPG 4) has been refined over time to address the unique issues facing provision for industry in London5. The DLP builds on these refinements. It too recognises that long term industrial decline has left London with both an overall surplus of industrial development capacity and, in some places, a shortage of affordable provision of different types for firms which still find London a competitive industrial location. Even more than in the country as a whole, small businesses dominate the industrial sector in London. Improving quality of provision remains a key concern but there is also a need for ‘yard and shed’ based, lower order activities. The DLP refines the established policy distinction between local and strategic industrial capacity. More generally, the DLP underscores the importance to London of national policy (PPG 1, 3, 11, 12 and RPG 9) to review non-housing allocations and consider whether some might be better used for housing or mixed use development, to intensify development in appropriate locations, to coordinate economic development and planning activities and to foster mixed-use development. This SPG is supported by recent statements by the Chancellor and the Office of the Deputy Prime Minister. In general terms, government ‘will propose that local authorities should allow land allocated for industrial or commercial use in their development plans, and redundant buildings, to be used for housing or mixed use development unless a convincing case for retention can be made6’. More specifically, it will seek ‘expeditious and sympathetic handling of planning proposals which concern land allocated for industrial or commercial use but which is no longer needed for such use7’. Government proposes that boroughs ‘should consider such planning applications favourably unless’ they compromise PPG 3, RPG or up to-date development plan policies. There is particular concern that such proposals should not lead to over supply of housing (very unlikely in London) and that they should not undermine demonstrable, realistic prospects of land being taken up for industry/commerce or regional and local strategies for economic development and regeneration.

3 3.1


Policy 3B.6 of the DLP sets out the general approach to provision for industry:

• ‘With the LDA, boroughs and other relevant partners the Mayor will
promote and manage the varied industrial offer of the Strategic Employment Locations (SEL) set out in Map 3B.1 and the Strategic Employment Locations Annex as London’s strategic reservoir of industrial capacity’ manage the protection, release or enhancement of industrial sites outside the SELs, taking account of the strategic criteria set out in Supplementary Guidance’.

• ‘Boroughs should identify SELs in UDPs, and develop local criteria to


The DLP notes the links between manufacturing and other sectors, the relative dynamics between manufacturing and wholesale distribution employment and highlights the scope for growth in high value added and design led manufacturing. It


The Mayor’s Supplementary Planning Guidance

Industrial Capacity

outlines the scale of industrial capacity in London (6,900 ha), cites the estimate of industrial land release expected at the time the DLP was prepared (32 ha pa) and notes that ‘because of constraints on the quality, availability and nature of current supply, there may be local shortfalls in quality modern floorspace and readily available development land, particularly in parts of West and South London. This puts a premium on integrated action by the LDA and other relevant agencies to bring forward the most attractive sites at a time when the planning process must manage selective release of strategically surplus capacity to other uses’ paragraph 3B.31. ‘To protect land for industry, the Mayor will promote the Strategic Employment Locations framework to reconcile demand and supply and take account of industry’s needs in terms of clustering, capacity, environment, accessibility and cost requirements through two basic types of location Industrial Business Parks and Preferred Industrial Locations’. 3.4 This SPG refines these industry specific and, where relevant, more general DLP policy themes for application to industrial provision in London. It reflects not just industrial objectives but also the broader concerns of the DLP. Of particular relevance is the need to foster more sustainable forms of development (especially DLP Policies 3C.1, 4A.14, 4B.1, 4B.3, 4 B.7, BR16 – 18) and to meet the challenges of economic and population growth, especially the need for additional housing (DLP Policies 3A.1, 2, 5). Thus, industrial land policy seeks a closer relationship between public transport accessibility and the need to secure more efficient use of development capacity and greater diversity of land uses. This does not mean that the sequential test can be waived for out of centre leisure and retail facilities proposed on industrial areas (DLP Policy 3D.2). However, it can mean that redevelopment of industrial sites in appropriate locations can accommodate work space, housing and some other activities providing that an attractive and safe environment can be created for all, that there is no net loss in industrial employment capacity (DLP Policies 3B.6, 4B.1) and that the thrust of the key industrial policy (3B.6) is not compromised. The SPG acknowledges that strategic policy cannot and should not cover isolated small sites specifically – this must be a borough matter. Strategic policy guidance can, however, provide criteria for refinement at local level to guide their development in the light of local circumstances. The main thrust of strategic policy must be concerned for the overall relationship between industrial demand and supply and with the main concentrations of industrial development capacity. Figure 1 Strategic Employment Locations (London Plan Map 3B.1)



Industrial Capacity

The Mayor’s Supplementary Planning Guidance


The larger concentrations, called Strategic Employment Locations (SEL) in the DLP, are mostly over 20 ha in size. However, in some areas, especially parts of West and South London (see paragraph 6.11), where there is particular pressure on industrial land, smaller sites e.g. of 10 ha, can be of strategic importance. To meet the needs of different types of industries, the SELs are divided into two groups: • Preferred Industrial Locations (PILs), which are suitable for firms which do not place a high premium on environmental quality. These usually fall within the B1 (c), B2 and B 8 Use Classes. PILs will not normally be suitable for B1(a) and B1(b) uses, although some ancillary B1(a) use is acceptable and some transfer between these classes may be inevitable under the General Development Order. PILs will not normally be suitable locations for large scale B1(a) office development. Nevertheless, they may be appropriate for other uses of an industrial nature, including some of those classified as sui generis e.g. car breaking, metal re-cycling, aggregate processing, bus garages, iron and steel pre-fabrication. However, this cannot be taken as a general policy position, not least because, by their nature, sui generis uses must be treated on their merits. • Industrial Business Parks (IBPs) are for firms which need better quality surroundings. These are usually B1 (b), B1 (c) and high value added B2 activities, require significantly less heavy goods access and are able to relate more harmoniously with neighbouring uses than those in PILs. IBPs are not intended for primarily B1(a) office development. Where B1(a) office development is proposed on an Industrial Business Park, this should not jeopardise local provision for B1(b) and B1(c) accommodation, where there is demand for these uses. Any B1(a) proposal, including redevelopment of existing offices, should comply with the DLP’s office policies, particularly in terms of location and public transport access. Proposals for science and technology parks are addressed by DLP policy 3B.4


The management regimes, regeneration needs, branding and offer of each category differ and there are usually differences in road access, public transport and infrastructure requirements, especially for locations with a strong wholesale distribution function. Historic strategic planning policy has been concerned primarily to protect all designated SEL from pressures for change to other uses. In this it has been largely successful8. Though the revised SEL framework in the DLP represents a slight contraction (3%) on the original to reflect changing market conditions, most of the historic change from industrial to other uses has been among smaller sites outside the SEL framework. Historically, these were subject to relatively crude, criteria based, strategic policies, which were supposed to be refined for local application. Through the DLP this SPG introduces more sensitive criteria and the Mayor’s UDP conformance powers enables them to be implemented more consistently. SPG OBJECTIVES The objectives of this SPG are to supplement and to provide detailed guidance as to how the broad policies of the DLP should manage industrial development capacity. In particular, the SPG seeks to:


4 4.1


The Mayor’s Supplementary Planning Guidance

Industrial Capacity

• ensure that sufficient land is available to meet future industrial needs, including those of existing firms, and • bring genuinely surplus industrial land back into more active uses to meet the wider objectives of the DLP, especially those to meet housing and other needs. 4.2 To do this the SPG refines the DLP’s policies and national guidance to: • provide a geographical framework for the LDA and other partners to identify and promote the supply of sites of appropriate quality needed by different occupiers, as well as guiding the release of surplus land for other uses. In general, and subject to local refinements, this will entail retaining much of the capacity in West and parts of Central and South London and carefully managing the release of surplus capacity elsewhere, especially in East London; • support partnership working, to provide choice and flexibility to meet the requirements of different types of developer and occupier, including small and medium sized enterprises (SMEs) and to provide strategic support through the planning system for protection of the best industrial land sufficient to meet demand; • manage pressures for changes from industrial to other land uses in different types of location, including protection of small, locally viable industrial sites; • more closely reconcile the relationship between demand and supply of industrial land. In the longer term, this will entail bringing the rate of change in industrial capacity closer to that of employment – possibly reducing the rate of industrial land loss to half to two thirds of that recorded during the early 1990s. • promote realistic, balanced land-use policies including release of land for other purposes where there is no demonstrable demand for continued industrial use. • promote a sub-regional approach to industrial land policy, with boroughs coordinating policy and economic development initiatives; • apply national and London-wide urban renaissance principles to encourage more sustainable use of industrial land by fostering higher density and, where appropriate, a wider mix of uses where these are mutually compatible and can produce a good quality environment and sustain or enhance provision for business. • encourage planning and design to achieve better integration of industrial areas into the fabric of the city, resolving tensions between uses and enhancing the security and permeability of industrial areas for walkers and cyclists as well as business. • promote active management of the stock of industrial land and monitoring of industrial demand and supply to inform strategic and local policy; • contribute to an ongoing review of the overall geographical framework for strategic and local planning policy across London in the light of changing market trends.


Industrial Capacity

The Mayor’s Supplementary Planning Guidance

5 5.1 5.2

CHANGING INDUSTRIAL DEMAND AND THE PLAN, MONITOR AND MANAGE APPROACH This SPG has been designed around government and the draft London Plan’s approach to ‘planning, monitoring and managing’ development. ‘Plan’: The ‘planning’ element of this trinity has three main components: • the strategic reservoir of industrial land – a resource which must be sustained for the short to medium term but nevertheless must itself be subject to periodic review to reconcile demand and supply in the longer term. • locally significant reserves of land, protection of which needs to be justified on a sub-regional basis. • smaller sites which historically have been particularly susceptible to change. In some circumstances they can better meet the DLP’s objectives in new uses but in others will have a continuing local and strategic role as industry. They will continue to be the areas of greatest change.


The SPG also contains specific guidance on mixed development, the quality and variety of industrial development and specific provision for small and medium sized enterprises and storage and distribution. ‘Monitor’: Sensitive and authoritative monitoring has a crucial role to play in a situation where overall land supply in London is finite, competing demands on it are strong and policy has to help sustain a sector which historically faced long term structural decline but which now appears to be consolidating and for which there is still strategic over-provision. In such dynamic circumstances, timely information is essential to inform the management of land and keep policy responsive to changes in the relationships between these factors. To understand the balance between the three main components of the SPG outlined in paragraph 5.2, their differing susceptibilities to change and the geographical variations in these differences requires data on different temporal and spatial scales. At the broadest geographical scale, it is necessary to know that for the medium to long term industrial demand across London is continuing to decline sufficiently to justify release of 30 – 50 ha pa (Annex 2 2.6-2.8). Indicative sub regional distributions of these figures are shown in Annex 1, Table 2. Similarly, it will be essential to check that within this trend, there is continuing ‘churning’ demand for 55 ha pa for new development. These will be key monitoring benchmarks. To test them locally and strategically will require a robust understanding of both demand and supply, particularly outside the SELs where, according to policy, most of the change should be taking place. For the SPG to be robust in the face of challenge, borough and strategic monitoring systems must demonstrate that policy is working as anticipated. This is likely to entail pooling monitoring resources and information on a sub-regional basis. Appropriate sub-regional and borough-level benchmarks to inform policy for industrial land could include: • Overall stock of industrial land and premises






The Mayor’s Supplementary Planning Guidance • Gross new industrial completions; • Gross take-up of industrial land and premises; • Industrial property changes of use and demolitions; • Supply of vacant industrial land and premises;

Industrial Capacity

• Industrial rental values, land values, yields and market perceptions • Businesses’ demands. 5.8 Just as the most recent review led to a 3% reduction in overall area covered by the SEL framework and informed boroughs in the approach to be taken to future provision, cumulative assessment of the changes suggested by these monitoring indicators will inform longer term reviews of the core SEL and local industrial capacity. Preparation of Sub Regional Development Frameworks will provide an opportunity to identify strategically important changes to the SEL so that they can be addressed in the review of the London Plan (see paragraph 5.12-5.14). Informed by the criteria in paragraphs 6.9 – 6.15, Boroughs will be expected to follow a similar course in their UDP reviews. ‘Manage’: Research into industrial land demand has stressed the need for active management in order to improve quality, meet the continually changing needs of occupiers, and deal with excessive industrial vacancy. The following guidelines are intended to move towards a strategic framework for the active management of industrial land in London. Guidance on interpretation of the DLP’s approach to managing the transfer of surplus industrial land to other uses, mixed-use development, the quality of development and provision for smaller firms is set out in paragraphs 6.1 – 10.2. Land should be managed to support national and GLA group objectives for business. In line with PPGs 11 and 12 and the White Paper ‘Our Competitive Future’, the DLP is integrated with the Mayor’s Economic Development, Transport and other Strategies and relevant GLA initiatives such as that to secure efficient einfrastructure. Both the DLP and this SPG complement the Economic Development Strategy (EDS) through support for clusters of related activities by protecting strategically important business locations and ensuring that clustering is a key factor to be taken into account when managing release of surplus industrial land outside these locations. The EDS seeks to respond to the needs of businesses, including SMEs, through business support, training, innovation and through specific regeneration initiatives which have both spatial and sectoral priorities e.g. for creative industries. They will complement the DLP’s intention to secure mixed-use development, including affordable business space, through planning agreements. The EDS also details the principles of the DLP by recognising and addressing the relationship between SMEs and Black and Minority Ethnic and local community enterprise opportunities. The DLP and Transport Strategy address the parking and other transport needs of SMEs within the context of those of London as a whole. This includes working towards implementation of a coordinated ‘level playing field’ for parking provision with local authorities adjacent to London. In managing and reviewing industrial capacity, including SELs, account should be taken of the scope for consolidating industrial capacity at particularly appropriate






Industrial Capacity

The Mayor’s Supplementary Planning Guidance

locations. Consolidation of SELs, or parts of SELs, is not a policy requirement of the DLP and this SPG does not seek to introduce new policy. However, in light of government’s recent proposals9 to stimulate a more active approach to releasing surplus industrial land, especially for housing, this SPG flags the need to begin work which will lead to a review of the SEL framework when the London Plan is revised. SELs and parts of SELs which can be consolidated to support national policy should be first suggested in Sub Regional Development Frameworks. This exercise must be coordinated strategically (and structured to minimise ‘hope value’) taking account of transport and regeneration as well as planning objectives to ensure that London’s overall future industrial needs are addressed. It is part of the management requirement set out in the DLP (paragraph 3B.30). 5.13 Consolidation must be informed by an authoritative appreciation of short and longer term market and policy requirements (see paragraphs 6.9 – 15). It must also be cast in the context of robust and sensitive relocation arrangements, which ensure that London jobs, and Londoners’ access to them, are not compromised. Land released as a result of such consolidation exercises, like that which may be released as a result of the proposed industrial expansion of London Riverside to serve the Gateway area, must be re-cycled to meet strategic as well as local priorities. Re-use for housing and ancillary activities will be the key priority. Borough experience has shown that with proper planning and management procedures and ‘given the link between population and employment, new housing is not necessarily the enemy of jobs’10. In exceptional circumstances, strategically coordinated, earlier releases of land from a SEL designation may be acceptable for strategic proposals of essential benefit for London which cannot be planned for or delivered on any other site in Greater London eg provision for the 2012 Olympic games in line with DLP Policy 3D.6. This proposal to begin the process of investigating the scope for industrial consolidation in the context of Sub Regional Development Frameworks and the review of the London in no way weakens the objective of DLP policy 3B.6 to secure an adequate supply of industrial employment capacity. Boroughs, developers and land owners must take this as a clear statement of principle. Attempts to realise ‘hope value’ through proposals for unacceptable alternative development of SELs will be strongly resisted.


SPG 1 – Industrial Capacity and Demand: the Plan, Monitor and Manage Approach
In implementing Draft London Plan policy, the Mayor will and the LDA, TfL, boroughs and other partners should:

• adopt a positive ‘plan-monitor-manage’ approach to planning for
industrial land in London to bring demand and supply into closer harmony;

• use the Sub Regional Development Frameworks to identify and justify

changes to the SELs so that these can be addressed in the review of the London Plan.

• co-ordinate monitoring of industrial land and policy development on a
sub-regional basis;


The Mayor’s Supplementary Planning Guidance

Industrial Capacity

• manage the stock of industrial premises so that it provides a competitive
offer for different types of occupier. This will entail both improving the quality of provision to meet users’ different needs, including those of SMEs and clusters of related activities and maintaining lower cost capacity or making provision for those requiring affordable business premises.

• initiate a review of the potential to consolidate industry in appropriate

locations and establish effective re-location arrangements in the context of national and regional policy, especially that to secure capacity to meet London’s future industrial needs. The GLA group will coordinate this process as it affects SELs.

6 6.1

THE STRATEGIC EMPLOYMENT LOCATIONS FRAMEWORK AND OTHER INDUSTRIAL PROVISION Strategic Employment Locations: As an evolving policy construct, the Strategic Employment Locations Framework has proved a valuable tool in achieving one of the objectives of this SPG - protecting London’s principal industrial locations. Very little industrial land within the SEL Framework has transferred to other land uses since 1994. In being so successful, the Framework could run the risk of fossilising land as ‘industrial’ when there is no longer demand for this use. However, the requirement to monitor closely demand and supply relationships outlined above and to review the framework in light of these will keep the framework in tune with market requirements and broader planning objectives. Historic policy towards the SEL Framework was not very successful at improving the quality of industrial sites in these areas. The scope for much more closely integrated planning, regeneration and transport activity now provided by the GLA group as a whole, coupled with a strong commitment to partnership working will address this historic shortcoming. If the pan London approach to industrial capacity is to be effective, it must be implemented and sustained by boroughs consistently. Departures from it will send confused messages to developers and tend to increase the ‘hope value’ of land making it uncompetitive for industry or even lead to it being kept vacant and out of productive, industrial use. Changes to the SEL framework shown in Figure 1 and in Annex 2 should therefore only be undertaken in the light of a strategic review of industrial demand and supply.



SPG 2 – Strategic Employment Locations Framework
In implementing Draft London Plan policy, the Mayor will and the LDA, TfL, boroughs and others partners should:

• where relevant in their strategies, Unitary Development and other plans,
identify the components of the SEL Framework shown in Figure 1 and Annex 2 of this SPG. London.

• promote the SELs as the prime locations for industrial activity in


Industrial Capacity

The Mayor’s Supplementary Planning Guidance

• through co-ordinated investment, regeneration initiatives, transport and
environmental improvements and the use of planning agreements, manage the differing offers of PILs and IBPs and provide local planning guidelines to meet the needs of different types of industry appropriate to each as indicated in paragraph 3.6.

• other than as part of a strategically coordinated process o mixed use

intensification (paragraphs 7.1 –7.7) development of non-business uses within the SEL should be resisted except where they provide local, small scale, ‘walk to’ services for industrial occupiers e.g. workplace crèches.


In many areas of London smaller industrial sites, which lie outside the SEL Framework, can be important in providing local employment and economic diversity. This SPG seeks to protect such sites for industrial activity where they continue to meet industrial requirements. However, it also recognises that historic policy was unrealistic in seeking to prevent the transfer to other uses of all industrial land across whole sub-regions of London. This applies even to parts of South and West London and of the fringe of Central London where market reports suggest that there is general but not universal shortage of useable industrial land. This SPG recognises that demand and supply of industrial land remains unevenly distributed throughout London. Following DLP paragraph 3B. 30 it provides guidance on redressing these imbalances, recognising that outside the SEL some industrial land will still be transferred to other uses in areas of general shortage, e.g. in parts of West and South London and of the Central London fringe, though most transfers will take place elsewhere. This requires a more flexible, criteria-based approach to industrial capacity than was provided by historic policy and one which is more rigorously attuned to changes in market relationships. Paragraphs 5.4-5.6 underscore the need for regular, strategically coordinated reviews of demand and supply of industrial capacity. Locally Significant Industrial Sites: Outside the SEL Framework, boroughs should designate on UDP Proposals Maps those sites of particular local importance which they wish to protect for industrial users. Where these sites are identified on Proposals Maps and are afforded the same policy protection in the UDP as those sites within the SEL Framework, there will be strategic support for boroughs to resist their development for non-industrial uses. However, to ensure that land so protected will be used efficiently, UDPs should draw on the criteria outlined in paragraphs 6.9 – 6.15 and must demonstrate that there is local demand for them in industrial use. Particular attention should be paid to retaining adequate capacity to meet the requirements of firms servicing Central London which require sites within or close to its fringe.



SPG 3 – Locally Significant Industrial Sites
In implementing Draft London plan policy boroughs when reviewing UDPs, should:

• protect locally important, viable industrial sites, which lie outside the

SEL Framework after testing them in the light of evidence of local and strategic demand (paragraphs 6.9 – 6.11) and against the criteria in


The Mayor’s Supplementary Planning Guidance

Industrial Capacity

paragraphs 6.12 – 6.15. These sites should be identified on UDP proposals maps. 6.7 Other Industrial Sites: Informed by guidelines in this SPG (paragraphs 6.9 – 6.15), boroughs should use flexible, criteria based policies to address any remaining industrial sites not shown on Proposals Maps and lying outside the SEL Framework. These policies will guide management of the sites for industrial and other purposes taking into account strategic and local planning concerns as well as market conditions. To inform application of DLP policy 3B.6 this SPG seeks to retain in industrial use higher quality industrial sites and those of poorer quality which meet a demonstrable need for low cost accommodation. To support the wider environmental and land use objectives the DLP (DLP paragraphs 23 – 32) it also seeks the managed transfer of sites which are genuinely redundant for industrial purposes, and where an alternative land use is more suitable in planning terms. It is anticipated that these will be mainly for housing including affordable housing (DLP Policies 3A. 1-2, 6 – 13) or, if they can be integrated with town centres, also for office, retail, leisure, civic and other town centre related uses (DLP Policy 3D.1 - 2). Boroughs, in UDPs, should identify the characteristics of locally valuable industrial sites (including those providing low cost accommodation), taking account of the nature of the overall industrial offer within the locality and likely demand from industrial users over the plan period. In view of the cumulative economic importance of small scale industrial sites and the strategic significance of the after-use of those which are genuinely surplus to industrial needs, the criteria guidelines to manage ‘Other Industrial Sites’ are a strategic as well as a local concern. In line with DLP Policy 3B.6 the criteria to be included in UDPs should be developed by boroughs in the light of local circumstances, local and strategic industrial market assessments and strategic coordination guidelines set out in paragraphs 6. 9 – 6.15. As part of this process, boroughs should co-ordinate monitoring and policy development with neighbouring boroughs on a sub-regional basis.


SPG 4 – Other Industrial Sites
In implementing Draft London Plan policy, Boroughs when reviewing UDPs, should:

• develop criteria-based policies to manage the release from or retention

in industrial use of those industrial sites outside the SEL Framework and not designated on Proposals Maps in the terms of SPG 3 above. Such policies should take account of demand (paragraphs 6.9 – 6.11) and the criteria set out in paragraphs 6. 12 – 6.15 below.

• ensure that sites released from industrial use through this policy meet

strategic as well as local needs. The first priority should be to meet the need for housing including affordable housing. Increasing capacity for town centre related development will also be important in appropriate locations.


In developing policy criteria for industrial sites outside the SEL Framework and not shown on Proposals Maps, boroughs should take account of the sub-regional demand and supply of industrial land. In this, they should be informed by groupings of boroughs to be identified in the published SPG which will provide a broad indication of borough level industrial demand and the broad policy response to this. 15

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The published SPG will recognise that within boroughs (and the general level of demand indicated for them) there can be marked local differences in demand and supply of industrial space. It will be for boroughs to justify and address these local departures from general market conditions prevailing in their areas. 6.10 The groupings set out below were identified by consultants11 in 1999 to reflect the sub regional balance between industrial land demand and supply suggested by market experience as well as broader economic indicators. In the short term they will be reviewed through this consultation process and through research commissioned to inform it. In the longer term they will be reviewed as part of the monitoring process proposed above. Those boroughs within the ‘ Restrictive Transfer’ category are encouraged to adopt a particularly restrictive approach to the transfer of industrial sites to other uses. Those boroughs in the ‘Managed Transfer’ category generally have a greater supply of vacant industrial sites relative to demand and should generally take a more permissive approach to transfer. The ‘Limited Transfer’ category is intermediate between the two. Borough level policies should reflect these local differences in supply and demand of industrial sites. The City of London is excluded as no significant industrial land remains there. Restricted transfer of industrial sites South West Central Bromley, Croydon, Kingston, Merton, Richmond, Sutton Hammersmith & Fulham Westminster, Camden, Kensington & Chelsea, Wandsworth


Limited transfer of poorer industrial sites West North East Central Brent, Harrow, Hillingdon, Hounslow, Ealing Barnet, Enfield, Haringey, Waltham Forest Hackney, Lewisham, Tower Hamlets Islington, Lambeth, Southwark

Managed transfer of poorer industrial sites East 6.12 Barking & Dagenham, Bexley, Havering, Greenwich, Newham, Redbridge

In developing criteria-based policies, boroughs should seek to retain those sites in industrial use which the borough considers to be most important for industrial users. These will generally include the better quality industrial sites, but may also include poorer quality sites which provide scope for low cost industrial accommodation for which there is demand. Boroughs should consider the criteria set out below for inclusion within such policies. Strategic Factors, including whether a site: • meets demonstrable short term demand for industrial development, and / or strategic long term demand;



The Mayor’s Supplementary Planning Guidance

Industrial Capacity

• is part of a larger area of existing industrial activity, or area designated for industrial protection; • offers potential for the in-situ expansion of existing industrial businesses; • supports local or strategically important clusters of industrial activity; • meets demand and addresses the particular needs of new or emerging industry especially those identified in DLP policies 3B.7, 9, 10 and 12 and 4A.3 and 10 eg waste, energy and recycling, taking account of the proximity principle where relevant. • is well located to take advantage of existing or proposed infrastructure or economic development / regeneration funding; • offers potential for the provision of small industrial units serving local residential and commercial areas, particularly where there is little alternative provision in the local area; • is needed to accommodate provision for transport in terms of forthcoming Mayoral guidance on provision for transport and safeguarding river related uses eg bus garages, boat yards. • contributes to local employment objectives and local economic diversity. 6.14 Site Characteristics, including whether a site: • is well located in relation to the strategic highway network or local highway network, in particular causing minimal traffic impact in residential areas; • offers potential for transport of goods by rail and/or water transport; • is located within or adjacent to a town centre, recognising that PPG6 and PPG13 promote high trip generating uses at such locations; • is well located in relation to public transport facilities, recognising that many industrial activities have relatively low trip generation and that other land uses (such as offices, leisure and retail) may be more appropriate in locations with high public transport accessibility; • offers potential for 24-hour working, or provides facilities for ‘bad neighbour uses’ with detriment to residential amenity, being well screened from neighbouring uses, particularly residential areas; • offers potential for space intensive activities which do not fall within the ambit of this SPG and would not, in this location, compromise wider planning objectives. • provides lower cost industrial accommodation suitable for small, start-up, or lower-value industrial uses or other businesses important to the local economy; • provides sufficient space for adequate operational parking and turning space for goods vehicles. 6.15 Industrial Demand Factors, including whether a site: • has been adequately marketed at realistic prices for a reasonable period (normally at least two years) and with potential for industrial redevelopment where this is required to meet the needs of industrial users;


Industrial Capacity

The Mayor’s Supplementary Planning Guidance

• has been vacant for a considerable period (normally at least two years, and up to five years in areas of generally strong demand), without realistic prospect of industrial re-use. 7 7.1 INDUSTRIAL CAPACITY AND MIXED USE DEVELOPMENT Historic industrial land policy resisted inclusion of non-industrial uses within SEL. This was partly because of blanket, environmental concerns that industry and other uses did not mix. It was also because, as higher value activities, other uses in conventional formats were thought likely to drive out industry and so erode capacity to accommodate it competitively. Despite moves towards ‘cleaner’ industry, geographical separation of uses will still be required by many of London’s industrial firms if they are to remain competitive. Many do not need and cannot afford a high quality environment and would not benefit from being mixed with other activities. Lower density, single use areas with adequate vehicle access offer these activities the greatest scope for viability in London. Preferred Industrial Locations and some appropriately located sites outside the SEL framework will continue to provide the most sustainable home for such activities. The external, environmental costs of other types of industrial firm can be less onerous on potential neighbours. With careful design and branding backed by clear planning briefs and agreements, provision for these firms can offer greater scope for mixed and more intensive forms of development. Good public transport access is an essential pre-requisite for such intensification. TfL can advise on existing and future public transport accessibility of different locations, including PTAL scores. While vehicular access will still be needed, this does not have to be as intrusive or exclusive as that associated with more traditional types of industry. Those activities that place a higher premium on added value rather than volume are particularly likely to fall into this category. Those with higher employment densities may get greater benefit from better public transport provision, which itself can only be viable in higher density areas. Government research and advice12 suggests that industrial uses will usually be accommodated on the lower floors of mixed developments with other uses above, though if access issues can be resolved, vertical rather than horizontal separation of activities may be possible. Most appropriate will be locations where such developments can be closely integrated with a wider mix of surrounding uses, such as on the edge of town centres. Though the higher environmental quality of Industrial Business Parks would seem to make them inherently more suitable for such development, there may be scope to redevelop and upgrade parts of some Preferred Industrial Locations in appropriate locations, e.g. on the periphery of PILs near stations or town centres, especially where there is a barrier separating the area from the rest of the PIL. These could enable consolidation of more environmentally sensitive, existing PIL tenants while maintaining the integrity of a local business cluster. Complementary, sensitive relocation arrangements are likely to be necessary to avoid loss of industrial employment of different types through the re-development process. The design of industrially led, mixed, higher density re-development should also ensure that overall there is no net loss of industrial employment capacity within SELs






The Mayor’s Supplementary Planning Guidance

Industrial Capacity

and Locally Significant Industrial Sites (see SPG 3 above). In view of the particular need to increase housing provision, especially of affordable housing, housing will be the key other priority on permissible mixed use re-developments. Leisure, retail, civic and other town centre uses will also be appropriate if the mixed use development can be integrated with broader proposals for town centre renewal. However, other than to provide small scale, local convenience services, such uses will not be appropriate outside town centres. 7.6 Re-development, intensification and selective support for higher density, mixed uses in these locations must not compromise their offer as the main strategic and local reservoirs of industrial capacity. Inappropriate re-development of even parts of industrial sites can compromise the industrial offer of wider areas. This is particularly important in areas where industrial capacity is in short supply (see paragraph 6.11). This SPG therefore supports the thrust of the Draft London Plan 3B.6 in underscoring the prime purpose of SELs which is to ensure an adequate stock of industrial employment capacity. Mixed-use development should only be permitted where it will support this central policy objective and support the DLP’s broader objective to encourage better use of land such as that which can be brought about by mixed use re-development. Without compromising policy to resist inappropriately located retail and leisure development, provision should be made for small scale, walk to facilities, particularly A1 and A3 uses and specialist services like crèches, which serve the needs of people working within industrial areas. Such provision is likely to be particularly important in larger industrial areas, including SELs.


SPG 5 – Industrial Capacity and Mixed Use Development
In implementing Draft London Plan policy the Mayor will and the LDA, TfL, boroughs and other partners should:

• identify strategically recognised industrial sites or parts of sites which

have good public transport accessibility, especially those within or on the edge of town centres, for industry led, higher density, mixed redevelopment. This re-development should not incur a significant net loss of industrial employment capacity or compromise the offer of wider areas as competitive industrial locations. support re-development where necessary.

• establish robust and sensitive industrial relocation arrangements to • where necessary improve provision of small scale, ‘walk to’ amenities

and services including crèches, which serve the needs of people working within industrial areas.

8 8.1

QUALITY AND VARIETY OF INDUSTRIAL CAPACITY The poor quality of sites allocated for industrial development is a major concern in many parts of London. Much of the vacant industrial land in London is unavailable for development because of various forms of constraint, or because it is unsuitable for modern industrial purposes. In 1998 it was found that at least 40% of vacant industrial land had constraints preventing immediate development13.


Industrial Capacity

The Mayor’s Supplementary Planning Guidance


Improving the quality of industrial sites will require co-ordinated planning, regeneration and transport actions, with co-operation between boroughs and the GLA group, especially TfL and the LDA. The short term geographical priority for these actions is set out in the LDA’s Corporate Plan. That for 2003 – 2006 focuses on Park Royal/Wembley, London Riverside, the City Fringe, Lower and Upper Lea Valley, London South Central, Woolwich and North Bexley, Kings Cross/Finsbury Park and Southhall/Hayes. The LDA also has a broader remit to address the needs of industry through its business led Production Industries Advisory Commission. In addition it will target the needs of life science, environmental, ICT and ‘emerging’ sub-sectors. The Agency will also seek to acquire sites, including compulsorily, which it considers are key to delivery of its programmes and priorities. Innovative approaches may be needed to improve industrial areas and meet the varied needs of key sub-sectors as well as new forms of production and working, including, in appropriate locations, genuine live work units. Paragraphs 7.1 – 7.7provide examples of how this may be achieved as part of mixed use re-development. A pro-active approach to enabling development through planning agreements both within and outside the SEL framework is likely to be important. The DLP provides the strategic context for planning agreements in London (Policies 5.3, 5.4 and paragraphs 5.39 – 5.42). Depending on the circumstances of individual developments they can be used, inter alia, to secure affordable works space as well as adequate e-infrastructure, transport provision including ‘car clubs’, contributions towards site assembly and de-contamination and provision for emerging industries highlighted in the DLP and Economic Development Strategy. Planning agreements will also be required to secure the balances of uses required to meet the mixed use requirements of SPG 5, the relocation arrangements and consolidation processes indicated in SPG 1 and paragraphs 5.12-5.13. With some notable exceptions, industrial development has been little affected by wider objectives to enhance the quality of the urban environment. While exacerbating development costs must be a concern for industries which find London to be only a marginally competitive business location, good design does not have to incur these, especially if it is incorporated from the outset of the development process. The LDA and the GLA’s Architecture and Urbanism and Planning Decisions Units have some capacity to advise on this. Design factors which could usefully be taken into account in this process include: • sustainable design and construction - further guidance will be provided in the forthcoming sustainable design and construction SPG • landscaping – traditionally not a significant concern in industrial development but modest investment can have a major impact on enhancing the environment • elevation treatment – imaginative use of new industrial cladding materials can have significant and cost effective environmental benefits • site layout – buildings should be integrated into their context. • designing out crime – draw on police design advisers to address lighting, circulation and security issues




The Mayor’s Supplementary Planning Guidance

Industrial Capacity

• intensification – maximise site attractiveness and uplifts in land values generated by proximity to transport infrastructure through higher density, higher quality redevelopment • settings - maximise site attractiveness and uplifts in land values generated by nearby, higher value or more attractive uses/surroundings through redevelopment • surroundings - design should complement and enhance the surrounding uses 8.5 In improving the quality of industrial provision account should also be taken of the needs of firms which make important contributions to the London economy but have negative environmental impacts. Boroughs should therefore ensure that there is adequate capacity for ‘difficult neighbour’ industrial uses in locations where they will not detract from the environment of other activities. These will usually be in PILs. Many of the difficulties which such industries have traditionally caused, can be avoided through careful design of facilities and their relationship with surrounding areas.

SPG 6 – Quality and Variety of Industrial Capacity
In implementing Draft London Plan policy the Mayor will and boroughs, the LDA, TfL and other partners should:

• seek to enhance the operating environment within and around all viable
industrial areas.

• subject to securing low cost premises to meet local needs, encourage the
re-development of London’s industrial areas to enhance their offer as competitive locations attractive to modern industry.

• seek imaginative, sensitive design and investment solutions which do

not entail a net loss of industrial employment capacity, which make more efficient use of space and which enhance the environment within and around industrial areas. necessary to secure the DLP objectives detailed in this SPG including premises for different types of industrial occupier, transport, e-related and other infrastructure, contributions towards site assembly and decontamination and meeting the needs of specialist industries.

• depending on local circumstances planning agreements are likely to be

• make provision for demand for ‘difficult neighbour’ industrial uses in

environmentally acceptable locations, normally within PILs, and through good design ensure that they do not compromise the viability of other activities or the regeneration potential of the area. Proposals for waste facilities should accord with the policies of the Mayor’s London Plan and Waste Strategy.

9 9.1

SMALL INDUSTRIAL ENTERPRISES The Mayor’s DLP and Economic Development Strategy recognise that most industrial firms in London are small and many may suffer from inadequate or inappropriate accommodation. This SPG seeks to protect viable industrial sites which can accommodate small industrial units suitable for start-ups and small industrial 21

Industrial Capacity

The Mayor’s Supplementary Planning Guidance

businesses. Where large, higher value schemes are proposed and there is demonstrable need for smaller or affordable industrial premises, boroughs should draw on national and metropolitan mixed use policy to seek planning agreements to secure provision of these as part of mixed use schemes.

SPG 7 – Small Industrial Enterprises
In implementing Draft London Plan policy the Mayor will and boroughs, the LDA, TfL and other partners should:

• protect industrial sites which meet demonstrable demand for lower cost
industrial accommodation.

• promote the provision of small industrial units suitable for small
businesses and start-up companies.

• secure provision of small and affordable industrial units in appropriate

locations as part of larger mixed use schemes, including commercial developments and residential schemes where careful siting, design and access arrangements can satisfactorily overcome environmental concerns.


The Mayor’s Supplementary Planning Guidance

Industrial Capacity

10 10.1

In the past there has been a view that warehouse development in general industrial areas should be resisted on the grounds that employment opportunities are fewer and inferior to those provided by manufacturing firms. However, distribution functions comprise a significant element of much general industrial activity in London and are expected to become more important. This is diminishing traditional differences in employment density between production and distribution. More specifically wholesale distribution facilities, such as large warehouses, also provide a key economic service for the capital, even though they usually have low employment densities. Planning policy must therefore take a positive approach to provision for distribution in the context of the overall objectives of the DLP. Heavy traffic generators should be steered away from environmentally sensitive locations to those where their impacts can be minimized, usually in Preferred Industrial Locations with easy access to the strategic road network. In line with sustainable transport policy set out in the DLP, boroughs should promote facilities at locations which allow the movement of goods by rail or water. Where boroughs do seek to restrict the development of warehousing facilities within industrial areas they should provide reasoned justification for this restriction, particularly where these restrictions apply within PILs. At a more strategic level, the review of potential to consolidate SELs proposed in paragraphs 5.12 – 5.14 will provide an opportunity to coordinate warehousing provision to more effectively meet wholesale distribution needs across London.


SPG 8 – Storage and distribution
In implementing London Plan policy the Mayor will and boroughs, the LDA, TfL and other partners should:

• encourage distribution facilities which will promote the movement of
goods by rail or water.

• in light of local and strategic assessments of demand, ensure that

provision is made for large scale distribution activities in environmentally acceptable Preferred Industrial Locations with good access to the strategic road network, and generally resist it elsewhere.

• generally accommodate smaller warehouse facilities and mixed

industrial / warehouse units within the SEL in line with strategic road capacity. Such provision on industrial sites outside the SEL should not compromise the local environment, access or road capacity or broader concerns to secure intensification at appropriate locations.


Industrial Capacity

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1 1.1 INDUSTRIAL LAND SUPPLY Comparable information on trends in the overall stock of industrial land is not available. The most up to date stock data14 shows that London contains 12.1 mll sq m of industrial floorspace and 15.6 mll sq m of warehousing space, both concentrated in outer London (Figures 2 and 3). A partial data time series shows availability of industrial land over the decade to 199815. This suggests that available land increased from 1,300 ha in 1987 to 1,600 ha in 1991 before declining to 1,200 ha in 1995 and 900 ha in 1998. LPAC estimated that between 1991 and 1998 releases to non-industrial uses averaged 75 ha pa. It calculated that only 2% of this loss was from sites within the Strategic Employment Locations. Much of the loss was concentrated in Inner East London. Considerable areas stood vacant for long periods: 45% of that recorded vacant in 1995 was still vacant in 1998. Of the sites becoming vacant between 1995 and 1998, 30% had some constraints on their re-development and 6% had major constraints. Overall, more than 40% of available land was recorded as having some form of constraint on development in 1998. The GLA and boroughs are currently updating this data series as part of the London Plan monitoring process.


Figure 2 Borough Distribution of Industrial Floorspace 2002

Source: ODPM. Commercial and Industrial Floorspace and Rateable Value Statistics, 2002. ODPM 2003


The Mayor’s Supplementary Planning Guidance

Industrial Capacity

Figure 3 Borough Distribution of Warehouse Floorspace 2002

Source: ODPM. Commercial and Industrial Floorspace and Rateable Value Statistics 2002. ODPM 2003.


Consultants Roger Tym & Partners and GVA Grimley16 estimated that in total, London contained some 6,900 ha of industrial land in 1999. This figure is broadly consistent with that estimated by LPAC. LPAC concluded that two thirds (4,600 ha) of the total lay within defined Strategic Employment Locations (SELs). Of this, 70% was designated purely as Preferred Industrial Locations (PILs), 12% as Industrial Business Parks (IBPs), nearly 16% as joint IBP/PILs and 1% as Technology Parks. The policy approach to the latter is outlined separately within the DLP under ‘Offices’. The sub regional breakdown of the different categories is shown in Table 1 and their indicative location is set out in Fig 1 (DLP Map 3B.1). Coupled with geographical variations in demand (paragraphs 6.9 – 6.12), this range in the distribution of the supply of industrial capacity underscores the need for local refinement of panLondon SPG through Sub Regional Development Frameworks. Table 1 Industrial Land within Strategic Employment Locations 1998 (ha) Sub-region Central East West North South Total PIL 179 1,558 654 406 482 3,279 PIL/IBP 72 652 723 IBP 241 155 98 58 551 Total 179 1,871 1,460 504 540 4,553

Derived from: LPAC Report 14/2000, Strategic Employment Sites: Revised Framework and Policy Advice, 1 Feb 2000


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This table does not show Other Employment Areas (OEAs), which lie, outside the Strategic Employment Locations. LPAC estimated that those that could be identified, including some proposed for mixed uses, cover about 2,200 ha. In addition, there were smaller, scattered sites which were not identified by LPAC. INDUSTRIAL LAND DEMAND On average, over the 30 years to 2001, London annually lost 24,100 manufacturing jobs (-2.3% pa) and 1,500 from wholesale distribution (-0.5% pa)17. In the late 1990s, Roger Tym & Partners18 found that the consensus among forecasters was that while total London employment was expected to grow, that in industry was expected to decline and more steeply than for the UK as a whole, though less steeply than in the past in London. Rates of forecast loss ranged from –1.7% to - 2.6% pa for the period 1996 – 2015. Their own forecast indicated a slightly slower decline (-1.1%, 2,900 workers pa) for manufacturing and slight growth (0.3%, 600 workers pa) for distribution. They suggested that this was because ‘London is gradually losing its comparative disadvantage because much of the activity for which the capital is not a competitive location has already left, and there are a number of actual and planned improvements which should make London a more attractive environment for industry’. The GLA’s more recent review of independent forecasts confirms these general trends19 . Its own independent projection20 suggests that manufacturing employment is likely to decline by1.6% or 5,100 workers pa and wholesale distribution to increase by 0.3% or 900 workers pa. Recent government estimates suggest that the vacancy rate of floorspace (as opposed to the overall amount of vacant industrial land) peaked in the mid 1990s at 15% before declining to 9% in 2000/01. Vacancy rates in London, especially inner London, have been consistently and significantly above those of other English regions. Within London, some boroughs e.g. Hackney 24%, Ealing 18%, Brent 15%, Newham 14% were substantially above the relevant Inner/Outer averages21. London industry is dominated by two sectors – distribution which accounts for 40% of industrial employment and paper, printing and publishing with 20% (though 60% of this sub sector works in publishing rather than printing or paper manufacture). RTP/Grimley’s suggest that industries which are likely to find London a competitive location are those which:

2 2.1




• • • • •

serve London markets are near the end of the physical production process, producing final commodities rather than capital equipment or intermediate goods produce time sensitive goods and services are high productivity and high value added but not necessarily high technology are at the borderline of industry and services, with a high ‘tertiary’ content


The Mayor’s Supplementary Planning Guidance 2.5

Industrial Capacity

Those which ‘typically do not find London a good location and over time are likely to decline relatively probably include heavy manufacturing plants serving geographically large markets’. In between these two extremes, mainstream activities are those for which London will often be a reasonably competitive location. They are likely to include activities which serve very localised markets and are comparatively low-skill and low-value added, but closely tied to London, such as low level distribution, motor repairs, some construction and a host of small scale services22. To translate these employment forecasts into demand for land, RTP/Grimley’s reviewed the relationship between industrial workers, floorspace and land in different parts of London. On the basis of their own, particularly modest forecast of decline in industrial employment, they suggested that in net terms London was likely to lose 32 ha pa to 2015. This was much lower than the 400 ha pa loss implied by government’s floorspace statistics for 1984 – 9423 (RTP/Grimley), the 32 - 97 ha pa loss suggested in an independent study by Halcrow Fox24, the 75 ha pa recorded by LPAC25 as being released from industrial use 1991 – 98 and the 51 ha pa implied by the GLA’s independent projections26 In light of the scale of decline in demand for industrial land indicated by these different sources, the 32 ha pa net loss figure reported in the DLP is very prudent and provides for a generous vacancy rate of approximately 14%. Moreover, it is based only on vacant land, not vacant land and premises. RTP/Grimley suggest that ‘even on the most cautious assumptions, there are about 500 ha of industrial land that will be available for other uses over the next fifteen years, and there could be as much as 800 ha’. More recent, independent re-working of the RTP data for the LDA27 indicates that, under some scenarios, the 32 ha pa figure could be increased to 80 or even 120 ha pa when greater weight is given to vacant premises as well as vacant land. This strongly underscores the robustness of the Volterra based28 51 ha pa figure put before the Examination in Public into the DLP. Industrial land policy cannot simply be predicated on a quantitative, ‘macro’ view of the overall relationship between demand and supply. Account must also be taken of qualitative and geographical mismatches in supply and demand, especially in view of the extensive physical and other constraints that affect industrial land. This calls for action which will address these constraints rather than simply seeking to sustain the overall stock of land in its present condition. Though the most recent, purely quantitative assessment suggests that there is surplus industrial capacity in all boroughs29, the consultants did not consider that this invalidated the conclusion of their earlier, more market sensitive appraisal - that in parts of South and West London the supply of useable and attractive industrial land may not be equal to requirements. This will be tested in a new market demand assessment (paragraph 6.9 – 6.11. This SPG provides the context for Sub Regional Development Frameworks to take account of these variations in demand and supply. Table 2 below illustrates, on the basis of different assumptions, how surplus industrial land might be released in London’s different sub-regions. The first of these assumptions reflects a pro rata release of between 30 and 50 ha pa based on the distribution of vacant industrial land in 1998. The second and third maintain the same London-wide scale of release but assumes that there will be 25% or 33% less release in South and West London and that the balance is re-distributed to East, North and Central London. Revised in 27






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the light of consultation on this SPG and the currently on-going 2003 Industrial Land Availability Survey, these illustrations will inform sensitivity tests in the final SPG to help monitor release of surplus industrial land through Sub Regional Development Frameworks. Table 2 Draft Sensitivity Benchmarks to Monitor Sub Regional Distribution of Surplus Industrial Land Release (hectares pa) London Scenario 1: pro rata distribution on basis of vacant industrial land 1998 Scenario 2: as Scenario 1 but with 25% less loss in W & S and the balance redistributed to the E, N & C Scenario 3: as Scenario 1 but with 33% less loss in W & S and the balance redistributed to the E, N & C 2.11 30 40 50 30 40 50 Central 1.3 1.7 2.1 1.4 1.8 2.3 East 16.6 22.1 27.7 18.0 23.9 30.0 West 5.7 7.6 9.5 4.3 5.7 7.1 North 4.8 6.4 8.0 5.2 6.9 8.7 South 1.7 2.2 2.8 1.3 1.7 2.1

30 40 50

1.4 1.9 2.3

18.4 24.5 30.7

3.8 5.1 6.4

5.3 7.1 8.9

1.1 1.5 1.9

Qualitative assessment of industrial land demand and supply relationships also underscored the need for policy to recognize that while there will be a net reduction in overall demand during the term of the Plan, at any one time there is likely still to be substantial demand for usable industrial land. On the basis of development trends it was estimated that ‘the long term average gross take up may be up to 55 ha per year’30. This points to the importance of concerted LDA, borough and private sector initiatives to meet the needs of the market, especially in terms of bringing forward ‘oven ready’ land and premises in locations attractive to industry.


The Mayor’s Supplementary Planning Guidance

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(Draft London Plan Annex 8) Table 3 Number 1 2 3 4 5 6 Preferred industrial locations Borough Barking & Dagenham Barking & Dagenham Barking & Dagenham, Havering Bexley Bexley Brent, Ealing, Hammersmith & Fulham Brent Brent Croydon Croydon, Sutton Ealing Ealing Enfield Enfield, Haringey, Waltham Forest Enfield Greenwich Greenwich Greenwich Hackney Harrow Havering Havering Hillingdon Hillingdon Hillingdon Hounslow Hounslow Kingston Lewisham, Southwark Lewisham Merton Merton Preferred industrial location name River Road Employment Area Rippleside Dagenham Dock (part) Belvedere Industrial Area (part) Erith Riverside (part) Park Royal

7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32

Wembley Stadium (part) Staples Corner Marlpit Lane Purley Way Area Great Western Road (part) Northolt, Greenford, Perivale (parts) Brimsdown Central Leaside Business Area, including Deephams, Garman Road, Leeside Road, Willoughby La. etc Freezywater North Charlton Employment Area Greenwich Peninsula West Plumstead Industrial Area Hackney Wick (part) Wealdstone Industrial Area Harold Hill Industrial Estate Coldharbour Lane Employment Area Uxbridge Industrial Estate Stonefield Way/Victoria Road Hayes Industrial Area North Feltham Trading Estate Brentford (part), including Transport Avenue Industrial Area, Commerce Road Chessington Industrial Estate Surrey Canal Area (part) Bromley Road Willow Lane, Beddington Morden Road Factory Estate


Industrial Capacity

The Mayor’s Supplementary Planning Guidance

Number 33 34 35 36 37 38 39 40 41 42 43 44 45 46

Borough Merton Merton Newham, Tower Hamlets Newham Newham Newham Newham Redbridge Redbridge Southwark Sutton Waltham Forest Waltham Forest Wandsworth

Preferred industrial location name North Wimbledon (part) Beverley Way Industrial Area Lower Lee Valley (part) London Industrial Park Marshgate Lane Area Thameside West Thameside East Southend Road Business Area Hainault Industrial Estate Bermondsey South East Kimpton Industrial Area Lea Bridge Gateway Blackhorse Lane Nine Elms


The Mayor’s Supplementary Planning Guidance

Industrial Capacity

Table 4 Industrial business parks Number 1 2 3 4 Borough Barnet Bexley Bexley, Bromley Brent, Ealing, Hammersmith & Fulham Brent Bromley Enfield Hammersmith & Fulham, Kensington & Chelsea Haringey Haringey Harrow Hillingdon Hounslow Kingston Newham Newham Industrial business park name Northern Telecom, Brunswick Park Thames Road, including Crayford Industrial Area Foots Cray Business Area Park Royal

5 6 7 8

East Lane St Mary’s Cray Great Cambridge Road (part) Wood Lane (part), including Freston Road

9 10 11 12 13 14 15 16

Tottenham Hale Wood Green (part) Stanmore (part) North Uxbridge Industrial Estate Great Western Road (part) Barwell Business Park British Gas Site Beckton Gateway


Industrial Capacity

The Mayor’s Supplementary Planning Guidance

1 2

Mayor of London. Planning for London’s Growth. GLA, 2002 (TEC London Employers Survey 1996/97 cited in Roger Tym & Partners, GVA Grimley. Industrial Land Demand in London. LPAC, 1999 CEBR. London’s Contribution to the UK Economy. Corporation of City of London, 2002, GLA. Safeguarded Wharves on the River Thames, Consultation Draft. GLA, 2003 LPAC. Strategic Planning Advice for London. LPAC, 1994. GOL. Strategic Planning Guidance for London Planning Authorities, RPG 3. HMSO, 1996 LPAC. Strategic Employment Sites: Revised Advice on Planning for Industry in London. LPAC Report 14/2000, LPAC, 2000.

3 4 5

6 7

HM Treasury. 2003 Budget Statement. HM Treasury 2003 ODPM. PPG3 Housing Review Consultation Papers - Supporting Delivery of New Housing, proposed new paragraphs 42a. ODPM, 2003 LPAC. Report 14/2000, Annex 1. LPAC, 2000 HM Treasury, op cit ODPM. PPG3 Housing Review Consultation papers – Supporting the Delivery of New Housing, proposed new paragraph 42a. ODPM, 2003.

8 9

10 11 12

GLA Economics. Spreading Success. How London Is Changing. GLA, 2003 Roger Tym & Partners, GVA Grimley. 1999 op cit DoE. Planning Policy Guidance. General Policy and Principles. PPG1. HMSO, 1997 DTLR. Mixed Use Development: Practice and Potential. HMSO, 2002 London Residential Research. Developing Additional Housing Above and On Non-Residential Sites. DTLR, 2002.

13 14 15 16 17 18 19 20 21 22 23

LPAC. Report 14/2000. LPAC, 2000 DTLR. Commercial and Industrial Floorspace and Rateable Value Statistics 2002. DTLR, 2003 LPAC. Report 13/99. LPAC, 1999 Roger Tym & Partners, GVA Grimley. 1999 op cit. Mayor of London, 2002 op cit Roger Tym & Partners, GVA Grimley, 1999 op cit GLA. London’s Economy Today, II, 15 October 2002. GLA, 2002 Volterra Consulting. The Future of Employment in Greater London. SDS Technical Report 8. GLA, 2002 ODPM Commercial and Industrial Property Vacancy Statistics England 1991/92 to 2000/01. ODPM, 2003. Roger Tym & Partners, GVA Grimley 1999 op cit Roger Tym & Partners, GVA Grimley 1999 op cit


The Mayor’s Supplementary Planning Guidance

Industrial Capacity

24 25 26

Halcrow Fox, Future Sources of Large Housing Sites. LPAC 1998 LPAC. Report 13/99. LPAC, 1999 Roger Tym & Partners. Demand and Supply of Business Space in London. SDS Technical Report 21. GLA, 2002 URS Economic Development & Planning. London Thames Gateway Industrial Land Study (unpublished). LDA, 2003 Volterra Consulting, 2002 op cit Roger Tym & Partners, 2002 op cit Roger Tym & Partners, 2002 op cit


28 29 30


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