Not just housing: planning reform for construction’s supply chain
Planning for essential domestic minerals that go into construction materials will reach the point of no return soon. Reform is needed in this Parliament.
Labour have moved quickly in Government to build more houses and infrastructure. MPA’s members supply the essential mineral resources – sand, gravel and crushed rock - needed to deliver these ambitions.
But unless there are significant reforms to planning, permitting and the investment environment, these mineral reserves will not be fully replaced. This includes reserves of sand and gravel, which is a major ingredient of concrete and other construction products. The availability and supply of these essential minerals cannot be taken for granted any longer.
Unlike critical minerals such as lithium and cobalt, the UK is blessed by the availability of a wide variety of essential minerals, such as limestone, granite and sand and gravel, that meet our domestic needs and provide the foundation of our economy. These materials represent the largest materials flow in the economy – over one million tonnes of raw materials and products every single day.
The forthcoming 2023 Annual Mineral Planning Survey (AMPS) shows a long-term decline in GB mineral reserves. Put bluntly, we are using these important and versatile domestic mineral resources far faster than they are being replaced. For every 100 tonnes of crushed rock sold over the last decade, permission has been granted for just 33 more to be extracted, giving a replenishment rate of 33%. The equivalent figure for sand and gravel is 61%, but set against a much lower reserve base.
What this means is that we are within sight of serious problems if we are to maintain a ‘steady and adequate supply’ of essential minerals in line with national policy.
Big picture of declining reserves
In 2019, when the last official Aggregate Minerals Survey was published by Government, there were 488 million tonnes of sand and gravel reserves permitted through local planning. MPA’s annual industry surveys show that every year since, sales have exceeded new planning permissions by around 20 million tonnes each year. On a simplistic assumption that this trend line will remain constant, Britain is on course to run out in about twenty years. Set against the ten to fifteen years it can take to open a quarry, this means the point of no return is alarmingly close.
The problems created by mineral reserves being used faster than they are replaced would be felt sooner than the point at which we literally run out. Whilst they are essential, most construction minerals are a relatively low-value bulk material on a cost per tonne basis, so are incredibly sensitive to transport distance, both economically and environmentally. When supplying the market, unless quarries have access to modes of transport that enable economies of scale – rail, sea or water – road transport distances will usually determine where to source materials. As the availability and supply becomes stretched, increased transport distances would have an economic and environmental impact and place more pressure on those quarries that remain in operation. Supply might become less reliable, and more vulnerable to changes in the market, such as concentrated demand from major infrastructure projects competing with the needs of local housing and growth ambitions.
MPA’s projections for future demand show that demand is increasing for construction minerals, with around 4 billion tonnes expected to be required over the period 2022-2035. This is an increase on the previous forecast period, and would accelerate the decline in reserves without a corresponding increase in permissions to replace the minerals that have been used. Other potential factors accelerating demand could be a significant growth in floating offshore wind using concrete bases and the port infrastructure required to support this, wider changes to the energy grid, including the acceleration of new-build nuclear, or significant growth in housing demand, all of which are within the scope of the new Government’s ambitions.
One option could be an increased use of marine-sourced sand and gravel to satisfy demand. It already provides one third of all aggregates used in London and the South East and around half of all the sand and gravel consumed in Wales, and supply could be scaled up. However, this would require significant investment and is unlikely to meet the gap on its own. It also relies on transport connections – mainly rail freight – which could itself constitute a barrier to growth without significant Government commitment.
Planning reform: action in this Parliament
“The planning system - the single greatest obstacle to our economic success.” - Rachel Reeves, Mais Lecture 2024
The planning system currently acts as a source of delay and additionally as a deterrent to investment. MPA’s survey found that the average time taken for an application is around 22-23 months for a sand and gravel quarry.
The number of applications each year dropped significantly after 2010, to below 20 sites every year since, from a high of 52 in 2005. This corresponds to the shift away from strategic national planning toward devolved local decision making and shows the planning system becoming a deterrent to investment, on top of its delaying effect for the applications that do come forward.
To turn this around so that the industry is confident to submit applications, the planning system needs several changes. Mineral planning authorities (usually county councils) need to make decisions based on national need not just in their counties but beyond, and in full knowledge of anticipated demand to support strategic growth and development needs. This requires improvements to the data collected, including a much more transparent and usable infrastructure pipeline. It may also require changes to the rules mineral planning authorities follow to make decisions. Fundamentally, essential minerals need formal Government recognition as a strategic development resource that enables and underpins growth throughout the economy.
Regulation and investment environment
Beyond planning, regulatory reform would help accelerate delivery and improve the attractiveness of investing in sites. To open a quarry requires not only a planning permission issued by the local planning authority, but also various environmental permits and licences from the Environment Agency (in England; SEPA in Scotland; NRW in Wales and DAERA in Northern Ireland). The two systems operate separately but with significant duplication and overlap, increasing cost but also introducing significant delay. Tackling this would accelerate delivery of new sites, and we have recommendations.
Making the UK a more attractive investment proposition overall would help as well, and we hope this will be a feature of Labour’s Industrial Strategy and the forthcoming Budget. Making full expensing permanent, reforming business rates and improving access to the electricity grid are all improvements that would make the case for investing in our sector in the UK more appealing.
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