Labour's planning reforms for the life sciences sector

“To ensure available lab space scales to meet the ambitions of our fast-growing research-intensive industries, not least the life sciences sector, Labour will bring laboratory clusters within the scope of the Nationally Significant Infrastructure Regime in England … [this] will ensure quick and effective planning decisions clearly aligned with policy priorities...”

One of the key proposals to support the Life Sciences sector put forward by Labour is planning reform intended to support the creation of new laboratory clusters through the development of new stock or the conversion of existing buildings. Simplifying the planning process will no doubt assist supply, but is there real demand for additional space and is the right kind of stock being delivered?

Clinical trials are seen a key driver for take-up of laboratory space but the number of trials initiated in the UK has fallen significantly in recent years – the ABPI reported a fall of 41% between 2017 and 2021 with an equivalent fall in cancer trials. The 2023 Lord O’Shaunessy report identified a number of reasons for this, the most significant being the time and bureaucracy associated with clinical trial approval and set up coupled with a lack of time and resource to allow the NHS to participate effectively in trials. Pre-election manifesto commitments to keeping the UK at the forefront of the Life Sciences sector and supporting the NHS certainly suggest that there is political will to deliver change on both of these fronts but clearly it is going to take time and a great deal of investment to effect change.

Delivering the right kind of stock is a difficult proposition for real estate developers interested in the sector. Labour's strategy is focused on encouraging the growth of University spin-outs and creating a funding system that supports innovation so that these smaller enterprises can flourish. Developers and funders on the other hand have been most comfortable delivering stock that is best suited to the very largest global businesses. Conversion of existing office space might seem like an attractive pivot to meet laboratory demand from developing life science businesses, but there are real challenges to be faced in doing this:

• Labs require much more complex services.
• Purpose-built labs are usually in the 4.5 meter range for ceiling height rather than the 3.75 meter typical for offices. 
• Power supply requirements for laboratory space are typically three to five times that of an average office.  
• Vibration caused by transport hubs and adjacent development that would be considered normal for standard office use, can negatively impact research activity.
• Finally, and perhaps most importantly, the location of the space is vital. Without proximity to project partners (e.g. universities and hospitals) even the best designed lab schemes will falter.  

Real estate developers and investors are used to managing the interplay of occupier demand and supply. After the election result they will be thinking hard about how the new government’s proposed interventions in the life sciences sector might impact the market for laboratory space in the years to come.