The existing system of land use planning in the UK dates back to the 1947 Town and Country Planning Act and is therefore now well over half a century old. However, there have been indications that government is beginning to take seriously the case for radical reform. This Hobart Paper examines some of the government's proposals against economic evaluation criteria. The principal deficiencies are found to be that the proposals do not properly address important topics such as the internalisation of environmental externalities or land betterment taxation. The author discusses various options for change to the land use planning system primarily designed to introduce voluntary trading and the privatisation of development decisions. He argues that these options, and also market-based instruments such as tradable development rights, have the capacity to achieve a greater degree of allocative efficiency and to take some of the political heat out of the land use planning process.

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