Breaking Britain’s Bottlenecks: Why Planning Reform Is Key to Economic Growth

With the best intentions, the United Kingdom has engineered a crisis of its own making. For decades, a web of planning restrictions, environmental regulations, and bureaucratic inertia has throttled the country’s ability to build housing, energy infrastructure, and transportation networks at scale. These self-imposed constraints have driven up costs, hindered productivity, and exacerbated inequality. The government’s renewed focus on the three pillars of housing, energy, and infrastructure is not just desirable but essential for the country’s economic future and social stability.

Town planning lies at the heart of these issues. The rigidities of the Town and Country Planning Act have long constrained development, making it difficult to build new homes, transport links, and energy projects. The recently introduced Planning and Infrastructure Bill seeks to address these failings by streamlining planning approvals, accelerating major infrastructure projects, and reducing the power of local opposition to block much-needed developments. Yet, for meaningful change, these reforms must go further, ensuring that planning policy becomes a tool for enabling growth rather than an obstacle to it.

Housing is the most glaring failure. Britain’s homeownership rate has stagnated at around 65%, well below historical peaks. For young people, the dream of owning a home is slipping out of reach. The price-to-income ratio remains at crisis levels at 8.3 times annual earnings in England, over 10 times in London. First-time buyer numbers have plummeted, and new housing construction is barely keeping pace with demand. The postwar planning framework, designed to regulate orderly development, has instead choked off supply and driven prices ever higher. Even as affordability has deteriorated, planning approvals have dropped by 20% in the past year alone. The Planning and Infrastructure Bill’s focus on simplifying local planning rules and mandating local authorities to deliver more homes is a step in the right direction. Without reform, Britain risks locking out an entire generation from homeownership, deepening resentment and political instability.

The energy sector tells a similar story of artificial scarcity. Decades ago, Britain led the world in nuclear energy and North Sea gas production. Today, it has some of the highest electricity prices in Europe and among the lowest per capita energy production rates in the developed world. A patchwork of environmental policies has made large-scale energy projects prohibitively expensive and legally fraught, deterring investment in both renewable and non-renewable sources. The Planning and Infrastructure Bill includes measures to fast-track approvals for new energy projects, reducing bureaucratic delays that have long stifled development. While Britain’s renewable sector has expanded, it has not grown fast enough to offset the decline in domestic gas production. The result: energy insecurity, high costs for households and businesses, and a self-inflicted competitive disadvantage against countries like France, which embraced nuclear energy decades ago and now enjoys far cheaper electricity.

Transportation infrastructure is the third bottleneck. Britain’s approach to large-scale transport projects has become synonymous with delays, cost overruns, and legal disputes. The cost per mile for new railways in Britain is among the highest in the world. The Planning and Infrastructure Bill aims to cut red tape and enable faster delivery of major infrastructure, from roads to railways. Decades of underinvestment have left the country with an overburdened road network and unreliable public transport. The economic and social costs of this dysfunction are immense: congested cities, disconnected communities, and lost productivity.

The common thread in these crises is a failure to build. Britain’s planning laws have often made it easier to block projects than to deliver them. The reforms proposed in the Planning and Infrastructure Bill must be fully implemented and expanded to remove the regulatory and legal barriers that have stifled investment in housing, energy, and infrastructure. The future prosperity of the nation depends on its ability to build and the time to start is now.

Writer: David Maddox, Founder