Planning Bill

Part of the debate – in the House of Lords at 10:12 pm on 15th July 2008.

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Photo of The Bishop of Southwell and Nottingham The Bishop of Southwell and Nottingham Bishop 10:12 pm, 15th July 2008

My Lords, there is much that is good in the Bill, as well as some provisions that need challenging. I wish to focus specifically today on Part 11, Clauses 198 to 209 on the community infrastructure levy and its likely impact on charities in general but the churches in particular, which has been referred to several times already. First, though, I had better declare a non-pecuniary interest as a former professional planner as a member of the Royal Town Planning Institute. I serve on the Council of Planning Aid and chair the Churches' Legislation Advisory Service.

Noble Lords will recall that we have been here before. Last time, the proposed levy was called the planning gain supplement. Little has changed since then except in one important aspect: the planning gain supplement was to be a levy by local planning authorities on the uplift in land value resulting from the granting of planning permission. The Bill provides in Clause 200(5) that CIL may be levied on land even when its value has not increased as a result of the grant of planning permission.

At the moment, as we know, the system for linking planning gain to local authority infrastructure needs is a Section 106 agreement under the Town and Country Planning Act 1990. It is not mandatory and it is rarely applied to small-scale projects. It looks, however, as if the effects of CIL will be different—although we do not know that for certain because we have not yet seen the fine data of what is proposed, as the noble Lord, Lord Goodhart, referred to earlier.

The churches and charities generally are very disturbed by the proposal. Unless an exemption is made for charities, CIL will impose a completely new financial burden on them that they will find difficult to bear. The crux of the problem is this: if a commercial developer gets planning permission to build houses for sale, the CIL charge can be passed on to the ultimate purchasers if and when the houses are sold. Charities, however, do not normally develop land for sale—they develop for their own purposes such as laboratories, offices or perhaps, in the case of a university, student accommodation; develop for some purpose such as social housing for rent; or aim to sell part of the site to finance the rest of the development. But there is frequently no sale at the end of the development process from which to pay CIL.

The Government's position on the voluntary sector was set out in the other place by the Minister, John Healey, during the Commons Committee stage on 31 January. He explained that the principle of CIL is that there will be no general exemptions in line with the current Section 106. He said that the current system is,

"blind to what developers do with their profits or to whether a developer is also a registered charity".

He did, however, say that,

"at some stage this year, when we have been able to discuss the matter in more detail ... we will set out our approach to exemptions. In doing so, we will ensure that any potential qualification for exemption must be fair and justified and refer to an objective set of criteria".—[Official Report, Commons, Planning Bill Committee, 31/1/08; col. 611.]

We have not yet seen any proposal for exemptions and unless some kind of exemption is provided, projects that would otherwise have been taken forward will be reduced in scope or scrapped altogether.

This is not simply idle speculation; I can cite a couple of concrete examples. There is a case where the parish facilities are too small for a growing church and where the parsonage is financially unviable for the 21st century. The church has a large hall attached; it also owns a two-storey hall, let as a nursery during the week. A scheme is being developed to provide extended facilities for the growth of the church and work among young people, a new parsonage, and sufficient housing to enable the scheme to become financially viable. The challenge is to provide enough homes to raise sufficient funding to be carried over to fund the construction of improved and extended parish facilities. The scheme is already on the edge of financial viability because of the limited size of the site. CIL would kill it and, quite apart from the effect on the work of the church, some 25 to 30 houses would not be available to address the housing shortage in the area.

My second example concerns collaboration with the local authority over the relocation of a library which seeks to meet the need for a community centre, a health centre and pharmacy, a new building for worship and a new parsonage. The proposed scheme also includes 13 new homes. The challenge is to raise sufficient funds from the sale of the land to build the new place of worship and to replace the parsonage that has to be demolished to enable the new homes to be built. Parts of the scheme will be local authority/health authority-funded, so the effect of CIL will be neutral, but so far as the church's resources are concerned, CIL would render it unviable. That would deprive the community of 13 new homes and a community centre.

These are by no means isolated instances. The DCLG's document on CIL, dated January this year, states at paragraph 58:

"Government agrees if development is not delivered because the CIL is set at unaffordable levels, then the CIL will not be meeting its objective of helping to unlock development".

For some charities and projects, there are no affordable levels. With the exception of VAT, charities do not pay tax. The reason is that successive Governments of all political persuasions have taken the view that charities, by definition, operate for the public benefit. That is enshrined in the Charities Act 2006. In addition, charities provide facilities that are part of the local infrastructure. Charity trustees do not start building projects as some kind of personal legacy; they do it to advance the objects of the charity.

As a result of CIL, facilities that would have been built for the benefit of the public will not be built. Is that really what Her Majesty's Government want to happen? How does it fit with their avowed desire to involve the voluntary sector more fully in service provision?

Finally, the detail of CIL is to be set out in regulations, which we have not seen. As we all know, when they are finally laid, they will be unamendable. I led a delegation from several charitable umbrella bodies to meet officials working on the Bill. We had a useful session and I hope that progress can be made, but we would still prefer to see an exemption for charities in the Bill. At the very least, we want a firm assurance from the Minister that something will be done in the regulations.

A flourishing voluntary sector helps build social capital and social cohesion. If CIL is imposed on charities, the loss will be to society at large. Schools and houses will not be built, the development of community facilities such as village halls will be hindered, and organisations that are already short of funds to care for important parts of the built heritage will have even less money for maintenance. Where is the public good in that?