Planning for the revolution | Is blockchain going to disrupt the property planning process?
Published on 1st Feb 2018
It is widely acknowledged that issues such as speed, transparency and cost hamper the planning system in England and Wales. The disruptive technology of blockchain holds the potential to revolutionise the planning system to address precisely these issues. Nevertheless, the significant barriers to adoption are likely to mean that a full revolution is still some way off.
Re-cap: what is blockchain?
Blockchain is, in essence, a digital database (or ledger), distributed across a network of computers. Records are immutable and protected by cryptography and are, therefore, protected against human error, editing and deletion (read our introduction to blockchain note for a fuller explanation). The adaptability offered by blockchain means it has the potential to underpin financial transactions, asset transfers (read our note on blockchain and land registries) and regulatory obligations. Blockchain technology can also be used to power so-called ‘smart contracts’, under which designated actions are performed automatically upon performance of certain criteria, independent of either party to the contract. Blockchain may, therefore, offer the tools required to reform the planning system in England and Wales.
What are the potential benefits to the planning process?
Blockchain offers the possibility of a much faster and streamlined planning process. Take, as an example, an application for permission in principle. A blockchain register could include information on each site allocated within a local plan, with the requirements for permission to be granted tailored to each specific site (the type of development permitted, the number of units, CIL contributions etc.). By combining blockchain, smart contract and digital signature technology, a developer could confirm its development specifications and, if in line with the site requirements, permission in principle could be instantly issued.
Notifications could also be sent to third parties whose approval is required, such as the Environment Agency, for review and input. This would help reduce delays and could lead to multiple agencies being notified, in a specified order, or at the same time. For local authorities, it may help to remove the burden on public resources, as the planning process becomes less document heavy.
Although the planning process does not lend itself to becoming entirely automated, it is evident that certain aspects could benefit from a blockchain/ smart contracts system. Not only would it help to speed up the planning process, but it may also lead to improved rates of house building at a time when the government is keen to build 250,000 new homes a year.
For developers, knowing exactly what a local authority requires, in order to approve a planning application, is often one of the greatest challenges. A local plan containing detailed information on each site would provide greater visibility on the expectations and requirements of local authorities. Developers’ financial appraisals are likely to be greatly improved, and more reliable, if local authorities were to provide information on s106 obligations and CIL payments within the local plan for individual sites.
Local authorities could also review their approval requirement, for allocated sites, more frequently. With information being updated at regular intervals, this should encourage more development as well as better quality planning applications. Finally, blockchain could also benefit the public by making the planning process more transparent. A blockchain system could help by building greater trust between planning authorities, local residents and developers.
A blockchain-based planning system would also provide for local plans, which are tailored to each particular site, to be updated in real time. Rather than developers having to base their appraisals on local plans, which may be a number of years old, developers could be confident that the site specific local plan was up to date. The resource to regularly update local plans could be made available through the automation of other parts of the planning process, creating a much more cost effective and efficient planning system.
Hurdles to overcome
Although blockchain offers significant potential benefits, there are significant obstacles to implementing a blockchain-based system. Firstly, the time and cost of adopting blockchain to manage the planning process, even in part, is likely to mean planning authorities in England and Wales take a measured approach. We are likely to see other sectors influenced by blockchain technology before major inroads are made into the planning sector.
A vast amount of information would also be held on a planning blockchain and such a system would, therefore, need to observe all relevant data protections laws. The immutability of blockchain records gives rise to particular data protection issues, which are currently being grappled with in other applications.
Finally, the planning process in England and Wales is made up of a number of steps, involves the careful consideration of a plethora of issues and requires input from various third parties. Consequently, blockchain technology is likely to be first adopted for certain discrete parts of the planning process, before any fully functioning blockchain planning system is developed. These various hurdles, although not necessarily insurmountable, are likely to inhibit the adoption of blockchain technology in the near term, at least for planning authorities in England and Wales.
An imminent revolution?
Blockchain has the potential, especially in England and Wales, to revolutionise the planning system. Despite government intervention, the continuing problems with the speed, transparency and cost of the current planning process makes the planning system ripe for blockchain deployment. However, given the various complexities with blockchain, it is still likely to be some time before blockchain becomes part of the planning system in England and Wales. Unless central government decides to invest in a major overhaul of the planning process, the limited funds which local authorities have available to invest in such systems may mean that a blockchain planning system is still some way off.
Nonetheless, it is still likely to be countries such as England and Wales, with mature planning systems, which become the first to adopt blockchain as part of the planning system.