Town centre impact tests for leisure and office uses

The impact test for main town centre uses is narrower than most people assume. National policy applies the sequential approach to all main town centre uses proposed outside a centre, but it applies the impact test only to retail and leisure development. An out of centre office scheme has to pass the sequential test and nothing more. A trampoline park, a gym, a cinema or a bar of any real size has to pass both, and the second test is where the evidence gets expensive.

That split drives how you scope the work. If you are promoting offices, spend the budget proving that no suitable, available site exists in the centre. If you are promoting leisure, budget for trade draw and investment impact as well.

Which uses the policy covers

The National Planning Policy Framework (August 2026 edition) defines main town centre uses in its glossary, and the list is wider than shops. It takes in retail development, leisure, entertainment and the more intensive sport and recreation uses, offices, and arts, culture and tourism development. Cinemas, restaurants, bars, pubs, nightclubs, casinos, health and fitness centres, bingo halls, theatres, museums, galleries, concert halls, hotels and conference facilities all sit inside it.

Check the policy codes in the current Framework rather than quoting an older paragraph number. The August 2026 edition reorganised the Framework into policy coded chapters, and the town centre policies moved with everything else.

The Use Classes Order matters here in a way that catches people out. Since the 2020 amendments, a gym, a clinic, a nursery, an office and a shop can all sit within Class E, so a change between them may need no permission at all. Where no planning application is required, no sequential or impact test can be applied. The tests bite on new build, on extensions, and on changes from outside Class E into a main town centre use.

The sequential approach where the use is not retail

The sequential approach asks whether the proposal could be accommodated in a town centre, then at the edge of a centre, before an out of centre site is considered. Applicants must demonstrate flexibility on format and scale. The decision maker then asks whether the alternative sites identified are suitable and available within a reasonable period.

Suitability is judged against the development proposed, not against a theoretically similar scheme the applicant might have brought forward. That is the practical effect of Tesco Stores v Dundee City Council in the Supreme Court, and it is the sentence most sequential assessments still get wrong. You are not obliged to redesign your scheme into something unrecognisable, but you are obliged to show genuine flexibility on floorplate, parking provision, car parking ratios and site configuration.

For non retail uses the flexibility argument is often technical rather than commercial. A climbing centre needs clear internal height. A medical day unit needs ambulance access and a service yard. A 24 hour gym needs a noise buffer from flats. Set out the operational requirement as a specification first, then test the centre sites against it, site by site, with a plan and a reason for each rejection.

A short list of sites with one line of dismissal each will be picked apart by the officer and by any objector with a planning consultant. Our page on the Sequential Test (Retail) sets out the structure, and the same discipline applies to leisure and office proposals.

Why offices escape the impact test

The Framework applies the impact test to retail and leisure development outside town centres that is not in accordance with an up to date plan. Offices are a main town centre use for sequential purposes but they are not caught by the impact test, because an out of centre office does not divert consumer spending from shops in the way a retail park does.

That does not make an out of centre office easy. The sequential test still has to be passed, highways and accessibility still apply, and the authority may resist the loss of employment land elsewhere or the creation of a car dependent business park. But it does mean that a request for retail impact modelling on an office scheme is a request the Framework does not support, and saying so politely at the pre-application stage saves a five figure consultant instruction.

The middle row needs care. A hotel with a large public restaurant and function suite, or a visitor attraction with a substantial retail unit, can be leisure or retail in substance even if it is described as tourism. Officers look at the floorspace breakdown, not the label on the application form.

Evidence for a leisure proposal

Where the impact test applies, national policy asks about two things: the effect on existing, committed and planned investment in a centre within the catchment, and the effect on town centre vitality and viability including consumer choice and trade.

For leisure that means identifying where the trade will come from. A gym draws from a radius determined by membership travel patterns. A cinema draws from a much wider catchment and competes with specific other cinemas. A soft play centre draws from family households within a short drive. The analysis should name the centres in the catchment, describe the leisure offer already in each, and reason about diversion in terms a committee member can follow.

The investment limb is the one that is frequently skipped and frequently decisive. Ask the authority directly what committed or planned investment exists in the relevant centres. A consented leisure led regeneration scheme that has not started, a council owned site being marketed, or a signed development agreement all count, and an application that ignores a scheme the authority is actively promoting invites a refusal.

Illustrative example: a 1,500 m² indoor activity centre is proposed on an industrial estate 1.2 km from a market town centre. The applicant identifies two centre sites, shows one is too shallow for the clear height required and one is under offer, names the three centres in the catchment, and reports that the only committed leisure investment is a cinema in a larger town 14 km away with a different catchment. All figures are illustrative.

Where the local plan sets its own threshold

National policy sets a default floorspace threshold for the impact test, and allows authorities to set a locally appropriate figure in the development plan. Many have, and the local figure is often much lower than the national default, particularly in authorities with small market towns and a history of out of centre pressure.

Read the adopted plan policy rather than the national default. Check the supporting text as well, because some policies set different thresholds for edge of centre and out of centre locations, or a lower threshold within a defined catchment of a primary shopping area. If a retail or leisure study sits behind the policy, read its conclusions too. Our note on meanwhile use land value covers a related point about how authorities treat vacant centre sites in the interim.

Where the proposal sits just below the threshold, do not assume silence. Authorities can still ask for proportionate information on impact as a material consideration, and a short assessment volunteered early is better than a request for a full one at week six.

Scoping the assessment with the officer

Agree three things in writing before commissioning work: the centres to be assessed, the study area, and the base year and data sources for any expenditure or trade figures. A Retail Impact Assessment built on a study area the officer rejects has to be redone.

Then decide what the assessment needs to carry. A proportionate document for a mid sized leisure proposal covers the policy context, the sequential site search with a plan, the catchment and competing offer, the trade or usage diversion analysis, the investment review, and a conclusion on vitality and viability. Where the authority wants wider economic benefits weighed in the balance, an Economic Impact Assessment is the better home for employment and spend figures, kept separate from the impact test so the two arguments do not blur.

And resist the temptation to pad. An impact assessment that answers the two policy limbs in 30 clear pages carries more weight than one that answers them in 90.

Start by listing the centres in your catchment and asking the authority what investment it is committed to. Browse all 66 PlanScope report types to see which documents a town centre uses application typically needs.

PlanScope provides AI-assisted draft reports for planning applications. Reports should be reviewed before submission. We do not guarantee planning approval. This is general guidance, not legal advice, so check the position with your local planning authority or a qualified professional before relying on it.