Report (1st Day)

Growth and Infrastructure Bill – in the House of Lords at 3:39 pm on 27th February 2013.

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Relevant documents: 11th and 15th Reports from the Delegated Powers Committee.

Photo of Baroness Anelay of St Johns Baroness Anelay of St Johns Captain of the Honourable Corps of Gentlemen-at-Arms (HM Household) (Chief Whip, House of Lords), Deputy Chairman of Committees, Deputy Speaker (Lords)

My Lords, the noble Lord, Lord McKenzie, is very courteously giving noble Lords the opportunity to leave the Chamber, but it might be helpful if they did so quietly and as speedily as possible so that we can get on to Amendment 1.

Clause 1 : Option to make planning application directly to Secretary of State

Amendment 1

Moved by Lord McKenzie of Luton

1: Clause 1, page 1, line 9, after "designated" insert "in accordance with subsection (9)"

Photo of Lord McKenzie of Luton Lord McKenzie of Luton Shadow Spokesperson (Work and Pensions), Shadow Spokesperson (Communities and Local Government)

My Lords, I shall speak also to Amendments 3 and 14, which we have in this group. I can be brief on Amendment 3, because, to all intents and purposes, it seems to cover the same ground as government Amendment 4. Essentially, they require it to be stated in the Bill that types of application which can be directed to the Secretary of State rather than the local planning authority must be for a major development of a kind prescribed in regulations. We are content to accept the Government's formulation.

Amendments 1 and 14 relate to the designation of a local planning authority. They require that the criteria to be applied in designating and revoking designation of a local planning authority be the subject of a parliamentary process and in particular that both Houses of Parliament be asked to approve the regulations via the affirmative procedure. We debated this in Committee and noted that the Delegated Powers and Regulatory Reform Committee had raised concerns over the lack of a parliamentary process. It is clear that the Government have responded, at least to an extent.

Designation is no trivial matter. It represents a considerable shift in process because it removes a democratically elected council's role of having the first engagement with the planning process. We know that the Government consulted on the thresholds for poor performance and a failing authority; that is, 30% or fewer major applications determined within the statutory period or more than 20% of major decisions overturned on appeal. The consultation has now ended, although we do not yet have sight of the full government response. We have just-hot off the press, I think-received a summary of the consultation responses. These show that less than half of respondents supported the speed and quality approach; that less than half of respondents agreed with assessing major developments within statutory time limits over two years; that only about a quarter expressed support for quality being assessed as the proportion of major decisions being overturned on appeal; and that less than half agreed with the 30%/20% formulation. It seems that there is a long way to go for there to be good levels of buy-in to this approach. What are the Government going to do given this response to the consultation? It is slightly worrying that they are on record as saying that they will not deliver their response until after the Bill has received Royal Assent.

It should be stressed that the amendment seeks a process for the criteria not only for designation but for revocation. The latter was a cause of a lot of concern given that the local planning authority may not handle major applications, other than fairly administrative tasks, once designation has taken place.

We remain concerned about the proposed mechanical process of designation, although it is accepted that agreements, formal and informal, would be taken into account in any process. We were comforted also by the Minister's words in Committee, where she said that,

"I hope I made it clear that if a local authority is going to be designated, it will be able to put forward the sort of points that he and the noble Lord, Lord Greaves, have suggested as a reason for why their applications have been slower than others".-[Hansard, 22/1/13; col. 1047.]

That is, there will be an opportunity to make representations. How does the Minister consider this approach might be built into the designation process?

I shall speak later to the government amendments once the Minister has introduced them and to the amendment of my noble friend Lady Whitaker. In the mean time, I beg to move.

Photo of Baroness Hanham Baroness Hanham The Parliamentary Under-Secretary of State for Communities and Local Government 3:45 pm, 27th February 2013

My Lords, I thank the noble Lord for introducing these amendments. I will move the government amendments, as he asked. I very much welcome the scrutiny that noble Lords have given this clause. We have looked very carefully at the issues raised, and I am very glad to be able to bring forward the amendments in this group that respond to them.

In Committee, concern was expressed about the need for greater reassurance and stronger safeguards in relation to the way that this clause could be used. This was also reflected in the reports of the Delegated Powers and Regulatory Reform Committee and the Select Committee on the Constitution. The amendments we propose are designed to provide that reassurance by making very clear in the Bill the circumstances in which this clause may be used and by providing Parliament with an opportunity to consider the criteria by which planning authorities' performance would be assessed.

Amendment 4 will ensure that applications for major development only can be submitted directly to the Secretary of State. The point was made quite forcefully in Committee that there should be a determination as to which applications were caught by these provisions. A number of noble Lords argued for this, and what we are doing now gives the Secretary of State the power to prescribe what "major development" means for this purpose. We intend to use the existing definition found in secondary legislation; for example, 10 houses or more or an equivalent amount of commercial space. This approach reflects the change that the noble Lord, Lord McKenzie, proposed in Amendment 3, and I am grateful to him for saying that he thinks what we have done is sufficient for him perhaps not to take his amendment any further.

Amendment 7 makes two important changes. First, it puts beyond any doubt that an authority could be designated under the clause only if it is not performing adequately in handling planning applications. Again, in doing this we are responding positively to the arguments put forward in Committee. Secondly, it requires that the criteria for designating authorities-and, indeed, for lifting any designation-must be laid before both Houses for a period of 40 sitting days before they come into effect only if there has been no vote in either House to the effect that the document should not be approved. We will come to what we expect those criteria to be when we debate the next group.

I believe these changes provide a powerful safeguard against any perceived future misuse of the powers that Clause 1 confers on the Secretary of State. I do not think there is any need to go further and require an affirmative procedure for the criteria, as Amendments 1 and 14 would require, as that would take us well beyond the sort of safeguards that underpin other performance regimes. It is also worth noting that where similar powers were taken by the previous Government in the Local Government Act 1999, the Education Act 1996 and the National Health Service Act 2006 there is no parliamentary scrutiny on the criteria that the relevant Secretaries of State use before exercising their powers. To go further than we propose would mean an unnecessarily protracted process for any changes that do not need to be made.

Amendments 8, 11 and 12 make some minor consequential changes to the clause. A further consequence is Amendment 53, relating to Clause 31, which provides for early commencement of proposed new Section 62B. This is for one reason only, which is to allow Parliament sufficient time to consider the criteria we propose to use while still allowing any initial designations to be made in October this year, as we set out in our consultation paper. This change has no impact on when the remainder of Clause 1 would come into effect.

The noble Baroness, Lady Whitaker, has not spoken to Amendment 10. I am not sure whether I shall move my amendments and give her an opportunity to do that. We have not heard from her. I think this is a bit unusual but since she seems to have missed the cut, I will move my amendments and leave the noble Baroness to speak to hers.

Photo of Baroness Whitaker Baroness Whitaker Labour

My Lords, I agree with my noble friend Lord McKenzie's inference from the responses to the consultation and welcome the direction of travel of the Minister's amendment, but I shall argue for more specificity in the Bill. I speak to Amendment 10 in my name and that of the noble Earl, Lord Lytton, who regrets that he cannot be here today. What I shall say has been drawn up with him, and I am grateful for his expert support and that of the Town and Country Planning Association. Perhaps I should also declare that I am an honorary fellow of the Royal Institute of British Architects.

Our amendment is tabled because of a gap in the concept of designation. Of all the evidence of poor performance by a planning authority, the one that has a particularly adverse effect on quality of life, as well as the local economy, is bad design, coupled with lack of sustainability, but that is not specified in the Bill. That power is open to wide discretion, whereas, at the other extreme, the consultation's proposals for failing authorities are pretty mechanistic and relate to speed and appeal decisions-not tests of quality but, rather, tick-box exercises to check compliance. The impact of designation on local democracy is very powerful, and speed and compliance with the NPPF with regard to appeal decisions should not, I submit, be enough to prompt a designation decision. That should be taken in the round and take full account of the quality of outcomes. That is particularly important because the broad principles in the NPPF are themselves open to quite a degree of interpretation.

The two extremes of a vague, wide power in the Bill and narrow, mechanistic tests for failure omit the real point of good planning-to approve development that is durable and practical, acceptable to residents and capable of improving their total environment as well as, in the long term, saving public money. That cannot be done without an informed approach to design; but design capacity is still very patchy among planning authorities, and many succumb to the will or blandishments of developers who may well not have the long-term interest of the local community at heart.

Therefore, the amendment makes it necessary for the Secretary of State to consider what the authority has done by way of contributing to sustainable development and good design, which complements existing duties in planning legislation rather than enabling them to be overridden. He has also to consider, in addition, what the local views are so that, for instance, if a neighbourhood has developed design criteria but cannot get the planning authority either to accept them or to draw up its own, it is not short changed by the process. Finally, he must consider what any wider public interest might be. That latter obligation enables discretion to be used when necessary, so that it is not a matter of a fixed threshold being triggered. Finally, the Secretary of State must publish his or her reasons for designating according to the criteria in the amendment, which element of transparency I hope that the noble Baroness will also support.

In conclusion, the amendment would go a long way to protect residents from the kind of system failure in design and sustainability which poor planning authorities all too often let themselves in for. In that way, growth and infrastructure really could work properly. I commend the amendment.

Photo of Lord Best Lord Best Crossbench

My Lords, I speak in support Amendment 10 in the names of the noble Baroness, Lady Whitaker, and the noble Earl, Lord Lytton. As this is my first intervention at Report, I note my relevant interests as president of the Local Government Association, chair of Hanover Housing Association and, in the context of the amendment, which concerns good design, vice-president of the Town and Country Planning Association and honorary fellow of the Royal Institute of British Architects.

In support of the intention behind this amendment, I would like to quote from an excellent speech delivered by the Minister for Planning, Nick Boles, to the Town and Country Planning Association shortly before Christmas. He said:

"People look at the new housing estates that have been bolted on to their towns and villages in recent decades and observe that few of them are beautiful. Indeed, not to put too fine a point on it, many of them are pig ugly".

He went on:

"Since new housing estates are all too often soulless and formulaic ... existing residents oppose any proposal to build new houses on green field sites, even when the land is of low environment quality".

He continued:

"In a nutshell, because we don't build beautifully, people don't let us build much. And because we don't built much we can't afford to build beautifully".

He later said:

"It is now for the planners, architects and developers, large and small, to seize the opportunity we have created and start designing beautiful places, which local people will welcome".

Poor design not only affects the lives of the people who occupy the new buildings, it also affects those who live in the same neighbourhood. Because so much new development has been, as Nick Boles says, "pig ugly", the great British public regularly turn out to stymie and oppose the creation of the new homes that are so essential to ending acute housing shortages.

This amendment would strengthen the emphasis on good design, which should always be a hallmark of projects obtaining planning consent. It would, thereby, make it easier to gain the consent of local communities to the building of the new homes this country needs so badly. I strongly commend it.

Photo of Lord Jenkin of Roding Lord Jenkin of Roding Conservative

My Lords, I intervene very briefly to say that I very much welcome the amendments that my noble friend Lady Hanham has tabled to this clause. I have recognised from the beginning that it has been very controversial, not least among local authorities. I, too, declare an interest here as a vice-president of the Local Government Association. I have made it very clear to the association that I support the main thrust of Clause 1, but equally I recognise its desire to see the criteria dealt with more formally in the legislation. The indications that we have had from the Government in this context have been helpful, as has the Government's amendment that it will be subject to regulations under the negative procedure, as my noble friend has indicated. These amendments are very welcome and take some of the sting, which local authorities have felt, out of the clause.

Local authorities need not be so worried about the remarks made by the noble Lord, Lord McKenzie of Luton, whose handling of this legislation I have always admired; he is extremely thorough. He quoted some of the figures from the summary of the consultation response, which I downloaded on my computer yesterday and read. The important thing to recognise is that, in the light of what I have just said about the general attitude of most local authorities towards this clause, it is hardly surprising that the response rate was not much more than 40 to 45%. One has to recognise that of the 227 replies received, 67% were from councils. A further 12% were from local government, professional or environmental organisations, and around 12% were from development interests or business groups. It was a pretty unbalanced response, but that is the nature of consultation; it is the people who feel strongly about such matters who respond. I am sure that those in the development industry look at the clause and say this is a step in the right direction. It is not surprising, given the figures quoted by the noble Lord, that there should have been what is, in a sense, a very heavily weighted response on the part of the local authority world. This does not in any way detract from the support I give to my noble friend for the amendments that she has tabled to this clause. I think that, with these amendments, the clause is a good deal more acceptable and I welcome it.

Photo of Lord True Lord True Conservative 4:00 pm, 27th February 2013

My Lords, I hesitate to take exception to any remark made by my noble friend, who I have admired and worked with for so many years, but local authorities are charged with the responsibility of administering the planning system and have knowledge of so doing. It is hardly surprising-in my view, they would be failing in their professional duty-if they did not respond to a consultation which affected the rights of planning authorities. In declaring my interest as leader of a local authority, I confess that my own authority was probably one among the number that raised a few question marks about the clause as originally drafted, so I hope that the Minister will not dismiss the representations made just because they are made by local authorities.

I strongly agree with my noble friend that the changes she has introduced are positive. I was one of those who expressed concerns at an earlier stage of the Bill about the breadth of Clause 1, as it was then drafted. My noble friend, in her typical way, has listened to those concerns, as the noble Lord, Lord McKenzie, very generously acknowledged. We have come a very long way and I hope that we will be able to do that on later aspects of the Bill. Therefore, I, too, thank my noble friend.

I have some sympathy in spirit with Amendment 10. I am perhaps breaking a habit in this regard: I, too, agree with what Mr Boles said on the matter of design. There is a question of whether that is a matter for the Bill but I agree with the analysis that planning would be so much easier if design were better. I would remark only that, as I said at an earlier stage, we must avoid the risk of any kind of moral hazard in this legislation. In terms of openness and the way in which designation is made, it is still not clear to me-it is certainly not inherent in the Bill-that where a future Secretary of State makes a designation and takes the game away from a local authority with the view of making a judgment on a major planning application, it must be the case that any representations made to the Secretary of State before he makes that designation become matters of public knowledge, in the same way as representations in terms of planning are placed on a website.

I have not tabled anything in this respect, but I hope that in response my noble friend will make it clear that there will be absolute transparency in that respect. There can therefore never be any suspicion that any powerful interest has got at any Government behind the scenes, leading to the designation of a local authority which may have been a little bit awkward to somebody who wanted to get a major planning application through. That is not an obstacle to what my noble friend has put before us, which I welcome, but perhaps she might be able to respond-if not now, in correspondence-on that specific point of transparency.

Photo of Lord Tope Lord Tope Liberal Democrat

My Lords, as this is the first time I have spoken at this stage I, too, must again declare my interest as a member of a local planning authority in London. Briefly, I echo the sentiments of both my noble friends who have just spoken; even though they started by disagreeing with each other, in effect they are saying the same thing. I recall recognising at Second Reading that the Minister is well known for listening, and saying that on this occasion I hoped that she would not only listen, characteristically, but hear and be able to act accordingly. I am grateful that she has indeed listened and heard and that we have these welcome amendments. I rather gather that the government amendments are being welcomed on all sides of the House. While not making this clause perfection, they have certainly improved it considerably.

In saying that, I have had the chance only to have a very quick look at the consultation results, which we received fairly late yesterday. I am a little surprised that there is so much support for the proposals in Clause 1, including from local authorities. I cannot help wondering whether, if we were to consult now-I am not suggesting that we should-on Clause 1 as it is likely to read after today, we might see even better results. With the reassurances that have been, and I think still will be, given on it, Clause 1 has been made far less onerous than when we first looked at it. I welcome the movement from the Government and their amendments before us today. They do not go as far as some of us would wish but they go considerably further than we might have hoped at an earlier stage and we on these Benches certainly welcome them.

Photo of Baroness Hanham Baroness Hanham The Parliamentary Under-Secretary of State for Communities and Local Government

My Lords, we are running slightly out of order so, with the leave of the House, I will speak now and the noble Lord can respond after me.

I am glad that most noble Lords have had an opportunity to see the consultation. I made it clear in Committee that I would try to ensure that the consultation responses, at least, were available to the House, and that is what we have done. It would be fair to say, as the noble Lord, Lord Jenkin, has done, that with any consultation parts are agreed and parts disagreed. If I did not misunderstand my noble friend Lord True, he suggested that we might dismiss anything that had come in from a local authority. I can assure him categorically that that is not the situation.

Photo of Lord True Lord True Conservative

If thank my noble friend for giving way. I absolutely did not make that suggestion and certainly not of my noble friend. I was saying to my noble friend Lord Jenkin that I hoped he would not suggest that we should dismiss the comments of the local authorities.

Photo of Baroness Hanham Baroness Hanham The Parliamentary Under-Secretary of State for Communities and Local Government

I apologise for missing the fact that this was an aside. I will not take it any further, other than to underline the point that we listen very carefully to what local authorities say about legislation and we always will.

I am also grateful for the general support we have had. I understand that there are still concerns about this designation but we are trying to keep it as simple as we possibly can. In that regard, I will briefly address the noble Baroness, Lady Whitaker, and the noble Lord, Lord Best. We will be discussing the criteria in Amendment 10. They may want to intervene again in the next group but I think and hope I can deal with it. It is important to remember the whole purpose of this clause, which is to encourage good and timely decisions from local authorities and to give applicants for major development the choice of a much better service. There is no question here that, where the authority is designated, an applicant cannot still go to them. They are given the choice of being able to go to a local authority or being able to go immediately to the planning inspector. At the moment, they can do that after 13 weeks if an application has not been dealt with, but now they can go right from the outset.

In the context of design, sustainability is hugely important. However, it is not relevant to what we are trying to do here, which is to get the number of appeals against a particular local authority down and the applications dealt with quickly. Local authorities have to take sustainability, design and good development into account. The noble Lord, Lord Best, pointed out very clearly what my honourable friend at the other end, Nick Boles, has said. We believe very strongly in that. The national policy framework deals with that as well and makes it very clear. However, these are not tests that we ought to apply as part of assessing the designation. They are not matters that can easily be assessed on the basis of our considerations and the very limited criteria which we are employing.

Were the amendment to be accepted, there would be a very real risk of having a process that is far from transparent. We do not want that: we want it to be as open as it can be and, perhaps, open to judicial review. We wish to avoid that by employing the criteria that will ensure that the assessment process is as fair and transparent as possible. As I say, we will have a chance to consider those further in the next group.

My noble friend Lord True-I actually understood him this time and did not get it wrong-asked whether there would be clarity where the applications were sent to the Secretary of State. Again, we will deal with this later in the Bill where there are relevant amendments, but I assure him that the intention is that it should be open and transparent, with local people having the right to make representations to planning officials. With that, I hope that the noble Lord will feel free to withdraw his amendment.

Photo of Lord McKenzie of Luton Lord McKenzie of Luton Shadow Spokesperson (Work and Pensions), Shadow Spokesperson (Communities and Local Government)

My Lords, I thank the Minister for her response to the amendments and for moving the Government's amendments. We are happy to accept Amendment 4, with perhaps a more grudging acceptance of Amendments 7 and 19 because we think that a more robust process would be appropriate. At least now we have a parliamentary process, though, so the Government have moved on that and we should thank the Minister for it.

I agree with the noble Lord, Lord Tope, that Clause 1 is far from perfect; we would prefer it not be in the Bill and we will debate that later, but these amendments have edged it forward in a more acceptable direction.

I agree with the noble Lord, Lord True, that it is entirely appropriate that local authorities should be engaged in this consultation; in a sense, it is their powers that are potentially restricted by this. Something is still unclear to me regarding representations. Again, I take the point of the noble Lord, Lord True, that we do not want representations by the back door from people to the Secretary of State, but the opportunity for local authorities to make representations to the Secretary of State before designation takes place is still a grey area, at least to us. In Committee, the noble Baroness seemed to open the door for some iterative approach which is encompassed in performance agreements, formal or informal. I hope that we can get greater clarity on that during our deliberations today.

The noble Lord, Lord Jenkin, basically said in respect of the responses from local authorities, "Well, of course they would say that", but the value of the consultation is not only the metrics-even though it was me who quoted them-but some of the issues that are raised, and they are very relevant to some of the debates that we are going to have.

We support the approach of my noble friend Lady Whitaker's amendment, spoken to and supported by the noble Lord, Lord Best. It reminds us that one way to judge quality might be the level of unsuccessful appeals, but that does not really go to the heart of whether a planning authority's decisions and engagement are focused on the quality of design and the achievement of sustainable development.

It is interesting to look at the consultation responses to Question 5,

"Do you agree that quality should be assessed on the proportion of major decisions that are overturned at appeal ... ?".

Is that the right metric for judging quality? Only 27% supported that while nearly half, 48%, were either opposed to it or had a qualified opposition to it. It is this lack of a qualitative assessment and reliance on the mechanistic approach to designation that is likely to drive down standards. Clearly, ignoring any view from parish or town councils, neighbourhood and business forums, or indeed any relevant representations, may make for clarity of criteria but, I suggest, does not assure us of the right sort of outcomes that we want from the planning process. Having said all that, though, and accepting the Government's amendments, I beg leave to withdraw the amendment.

Amendment 1 withdrawn.

Amendment 2

Moved by Lord Tope

2: Clause 1, page 1, line 10, at end insert-

"(aa) the local planning authority has been given 12 months prior notice by the Secretary of State ahead of their designation for the purposes of this section."

Photo of Lord Tope Lord Tope Liberal Democrat 4:15 pm, 27th February 2013

Amendment 2 will have the effect of giving a 12-month period between a local planning authority being identified as performing poorly and the time when it may become designated. In Committee I suggested 18 months, my noble friend Lord Greaves suggested 12 months and we did not need to argue over that. I have settled on 12 months because part of the Government's argument against the amendment at that time was that 18 months was too long.

There is a slightly different approach towards Clause 1 and designation. The Government have said that they want Clause 1 as a deterrent to local authorities. I prefer to see Clause 1 as an incentive. There is an important difference in thinking: a deterrent is something negative which implies punishment at the end if you do not comply, whereas I see incentive as encouragement, something positive, to seek to improve. That is what the Government seek to achieve as well. They are not out to punish local planning authorities-that has become very clear during the course of the many debates on this clause. They are seeking improvement too.

I suggest that there should be a 12-month period from the time when a local planning authority becomes aware that its performance is poor enough to warrant possible designation. It should then have the time both to take the necessary actions itself, if it can, to bring about the necessary improvements, to join with others in a peer-led improvement, on which the Local Government Association-of which I am not a vice-president-has a very good track record and which I know the Government have appreciated on many occasions. It also gives time for the Government and others to assess the direction of travel of that local planning authority. If it is improving at a significant rate, then to designate it at the end of that period would seem to be an unnecessary punishment. We should, rather, stimulate with greater encouragement.

This amendment is brought forward in good faith in the hopes of further helping the Government to achieve their objectives. The Planning Minister, Mr Boles, has said that he hopes that neither he nor any future Government will ever have need to use the provisions in Clause 1 because local planning authorities will have improved their performance and it will be unnecessary. The amendment allows a sufficient and reasonable time period to enable local authorities to bring that about themselves without suffering the punishment of designation.

I hope that when the Minister replies she will spell out how the Government see this as an incentive to improve, not a punishment to be inflicted for poor performance. When we look at the process in more detail we can see how that is being achieved. I beg to move.

Photo of Lord McKenzie of Luton Lord McKenzie of Luton Shadow Spokesperson (Work and Pensions), Shadow Spokesperson (Communities and Local Government)

My Lords, we heard from the noble Lord, Lord Tope, in Committee on a similar amendment proposing a period of 18 months. The intention is to give early warning to local authorities, so that they have an opportunity to improve with the help of other local authorities, the LGA, and possibly even the Government.

The thrust of the amendment is entirely reasonable. We suspect that the Government's response will be that authorities will know in good time. Designation will be based on two years' data and authorities will know the results of the first of these years. If they are failing the criteria for year 1, the danger signals will be there for the end of year 2. Councils will be able to seek to improve. This does not address the position at the start of the scheme where, before the ink is dry on the legislation, the die will effectively be cast.

At a recent meeting, which was kindly organised with the Planning Minister, it was hinted that there might be some easement in the early period. Perhaps the Minister will tell us whether there are any such developments. In any event, on an ongoing basis, knowing in year 2 that year 1 criteria have not been met may not give the local planning authority sufficient time to improve. Improvement may in part depend on the nature of any new applications. Tardy dealing with the major development submitted in year 1 may affect the data for year 2. For a small local planning authority, staff sickness and the timescales to recruit new staff are factors which anyway could mean that a local authority has insufficient time to turn things around by the end of year 2.

If the objective is to encourage sustainable improvement in local planning authorities, the rigid application of the criteria could be counterproductive. The noble Lord's amendment seems to give an opportunity of improving that situation under these arrangements. I say to the noble Lord, Lord Tope, that if we do not get a satisfactory answer from the Minister today, he should consider testing the opinion of the House on this proposition.

That leads to our Amendment 15, which requires the serving of a notice of intention to designate but then, crucially, a chance for a local planning authority to make representations as to why designation would be inappropriate-not for an extensive period but for just four weeks in this case. We know that the Government will argue for the importance of transparency and certainty in the process but they should also recognise that a range of factors could affect the timeliness of dealing with applications-difficult development, statutory consultees, extended and iterative community consultation, to name but a few. It might be argued that anyone served with a prospective designation notice is bound to make representations but of course not all will be justified.

In any event, at a recent meeting, we heard from the Planning Minister that although the number of likely local planning authorities to be designated has crept up-I think that he suggested 20-that surely is not too large a group for there to be the opportunity to make representations. We should think of the damage to and the demotivation of a planning team which gets designated through no genuine reasons that it could influence.

Perhaps I may again take the noble Baroness back to our deliberations in Committee when she said:

"There are usually reasons why planning applications are delayed, and one may be that an application will take longer than the normal consultation period. Before an authority is designated, it will be allowed to put that view forward and say that it has not been able to deal with certain applications because it has agreed that the process will take longer, or there may be some other reason. A portcullis will not just come down; discussions and explanations will be possible".-[Hansard, 22/1/13; col. 1032.]

That seems to be pretty clear and suggests that there should be scope for precisely what the amendment in the name of the noble Lord, Lord Tope, and our Amendment 15 seek. Unfortunately, from all that we have heard so far, it seems as though the portcullis will just come down and that there will be no stay of execution on this.

Photo of Baroness Hanham Baroness Hanham The Parliamentary Under-Secretary of State for Communities and Local Government

I thank both noble Lords for these amendments, which, as I have said, open up the discussions on the criteria and the means of designation. The noble Lord, Lord Tope, has said that with designation we should be incentivising and not punishing. From the outset, I want to make it clear that that is precisely what we are trying to do. While we designate because of a performance, we are trying to ensure that that performance improves. If this is an incentive to do that, that is precisely what we are trying to do.

How the designation process will work is very important. As a matter of course, we are consulting on it. I think that it would be helpful if I begin by giving noble Lords an indication of what people have said and how we intend to respond. The consultation closed on 17 January and, as noble Lords have said, there were 227 responses, many of them from planning authorities. There were, inevitably some differences of view and, having looked carefully at the responses, we are in a position to confirm how we plan to move forward on some of the key elements of the proposals. We will of course publish a full response to the consultation in due course, once the primary powers to be implemented have been finalised.

In the light of the consultation we have concluded that the speed and quality of decisions on planning applications are the most appropriate basis for assessing the performance of local planning authorities for the purpose of implementing this clause. The basis refers to the specific thresholds where, as the noble Lord, Lord McKenzie, rightly said, 20% were lost on appeal and 30% assessed on speed or lack of it-applying, in other words, to authorities that have had 20% or more of their major decisions overturned at appeal, or that have decided 30% or fewer of their major applications within the statutory period.

It bears repeating that these are very low thresholds. The intention behind them is to create a safeguard that encourages-or incentivises-good performance rather than to see a lot of designations. We remain of the view that designations should be a last resort and that these thresholds are in line with that objective. We will keep them under review-that is our starting point and firm intention. Through the amendments that we have made to Clause 1, Parliament will have the opportunity to consider the criteria before they are finalised.

There was considerable support for our proposal to allow extensions of time agreed between the local authority and the developer to be dealt with separately from the performance figures that we currently collect. This was one of the points addressed by the noble Lord, Lord McKenzie; where over time there are difficulties, as long as there is agreement with the developer for an extension of that time for whatever reason, that will not become part of the decision-making relating to the designation. These performance figures are part of promoting a simpler, more proportionate approach to planning performance agreements. We will reflect this as quickly as possible in the data that we collect. We also intend to proceed with our suggestion that any authorities that fall below the performance thresholds are considered for designation and dedesignation on an annual basis.

In line with this we have been giving particular thought to how we can put in place a cycle of support for authorities that are at risk of designation and have actually been designated. This is important for two reasons. First, by providing early support we very much hope that we can help any authorities that may be struggling to improve sufficiently and so avoid designation. Secondly, for authorities that have been designated we will want to make sure that they can get out of it as quickly as they can and that, if possible, designation can be lifted at the end of a first year.

In the light of the consultation responses, our position is that decisions about dedesignation should be guided primarily by an assessment of what the authority has done to address the reasons for underperformance, and its capacity and capability to deal effectively with major applications. This will mean reviewing at the time of designation what the authority needs to do to reach a satisfactory level of performance and to ensure that it can access whatever help may be required. To provide that support we have been having helpful discussions with the Local Government Association about the way that it can best be provided to those local authorities. We agree with the LGA that this is appropriately done by support from the sector, and that it has a vital role to play in driving improvement in planning services and addressing poor performances where they exist. Giving local government the responsibility to manage its performance is a principle we are committed to and have supported through our funding of the Planning Advisory Service.

An effective package of sector-led support will be crucial to ensuring that councils avoid designation and move out of designation as quickly as possible. Close sector involvement in the development of that support is essential to ensure that it is intelligence-led and responsive to the needs of each individual council. We have therefore agreed with the Local Government Association that we will develop new arrangements for the governance of the Planning Advisory Service that will give local government a clearer leadership role in developing a vigorous and effective package of support. Through this, we will together ensure that this programme delivers the support necessary to avoid designations, and that it is responsive to authorities' needs. I hope with that noble Lords will understand that we really want to see local authorities improving and that the Local Government Association will provide help, direction and peer guidance to enable that to happen.

I turn to Amendments 2 and 15. We will make sure that an authority has sufficient advance notice of any designation, but that is not something that needs to be in the Bill. As the noble Lord, Lord McKenzie, rightly said, it will be very apparent to local authorities which authorities are liable for designation as soon as the relevant statistics become available. Of course, some of those statistics are already in place, because they are issued quarterly, and that has been going on for some time. So it is perfectly possible and transparent for local authorities to be looking at those now.

In practical terms, we are going to go much further. Each year, we will identify those authorities that are at risk of designation in the following year if their performance fails to recover. Tailored, sector-led support will then be offered to those authorities to give them maximum opportunity to improve. So they will not only have advance warning that they are at risk, but the opportunity to address that situation. That is a key part of the discussions that we have been having with the Local Government Association, and we are also exploring what we need to do to identify and provide support to authorities that are struggling now, before any initial designations are made.

It remains our intention to make any initial designations in October this year, once the necessary secondary legislation is in place. We are considering the most appropriate period over which to assess performance for those first designations. That is one of the points raised, and we need to come to a decision about it. We are considering the most appropriate period for that, so that the data which are taken into account are as up to date as possible and reflect efforts by authorities to improve their performance since this measure was announced in September last year. In line with that objective, we will bring forward the release of planning statistics for the period from April to June this year so that this information can be taken into account in assessing performance for those first designations. This will give authorities more opportunity to improve their average performance before any decisions are taken. We have also made it clear that we will give any authorities proposed for designation an opportunity to correct any errors. The noble Lord, Lord McKenzie, asked me about what they will be able to do. They will be able to correct errors in the data or explain if they present a misleading picture, but there are limits; we cannot have a subjective process of special pleading which would be neither fair nor transparent. So authorities that may be designated will be given an opportunity to tell us if the data are, for some reason, not representative of their true performance, but we are not going to go any further than that.

While I cannot support the specific proposals in Amendments 2 and 15, I hope that from what I have said noble Lords will understand the extent to which we are putting in place a system that will result in designations only as a last resort and only after authorities have been given support to improve and, one hopes, to avoid a designation occurring. I hope, with that, that noble Lords will be satisfied with my replies and that the noble Lord, Lord Tope, will withdraw his amendment.

Photo of Lord McKenzie of Luton Lord McKenzie of Luton Shadow Spokesperson (Work and Pensions), Shadow Spokesperson (Communities and Local Government) 4:30 pm, 27th February 2013

My Lords, will the noble Baroness clarify the position at the start of the process? The first round of designation will take place in October this year and as most of the data that will influence that is already in existence, there is little that a local authority can do now, given the time, even if it is extended to June, which might have been the suggested date, to have a sector-led approach to help them to improve. We are almost in March, and the legislation is not yet on the statute book. What the noble Baroness said was helpful going forward, but I do not see that it helps people and local authorities at the start of the process that much. Can she give us any further comfort on that?

Photo of Baroness Hanham Baroness Hanham The Parliamentary Under-Secretary of State for Communities and Local Government

My Lords, I have two bits of comfort, if I can voice it like that. First, I think that local authorities that are in the designated zone will be very aware that they are and the Local Government Association is well prepared now to help them. Secondly, the figures that they can see at present may make them feel at risk once they have done that, but they can then approach the Local Government Association for help to see whether they can improve their figures going up to October.

Photo of Lord Tope Lord Tope Liberal Democrat

My Lords, I am very grateful to the noble Lord, Lord McKenzie, for his support so far and I am grateful to the Minister. The noble Lord, Lord McKenzie, said, in urging me to consider testing the opinion of the House, that we would have to listen very carefully to what the Minister had to say. I am grateful to the Minister for spelling out the whole process so fully and thoroughly. We will all want to look at it a little more carefully and read it in Hansard tomorrow, but it seems to me that she has gone a long way towards meeting the intentions of my amendment.

As I believed to be the case, she has confirmed that the intention is to seek improvement and not to punish. She has confirmed that it will be a sector-led approach, that discussions have taken place with the Local Government Association and that it will fully co-operate, help, support and lead that. She has rightly said that those authorities that are likely to be at risk under the criteria, which, as she rightly says, are set at a very low threshold, already know that they are at risk. I believe that, since the Bill was published last autumn, those authorities that feel themselves to be at risk are already showing some significant signs of improvement.

I feel that the Minister has accepted the intentions of my amendment; indeed, she has accepted almost everything but the words themselves. Having achieved that much, I feel that it is right and proper at this stage to beg leave to withdraw the amendment.

Amendment 2 withdrawn.

Amendment 3 not moved.

Amendment 4

Moved by Baroness Hanham

4: Clause 1, page 1, line 14, leave out from second "is" to ""relevant" in line 16 and insert "major development.

(2) In this section-

"major development" means development of a description prescribed by the Secretary of State;"

Amendment 4 agreed.

Amendment 5

Moved by Lord McKenzie of Luton

5: Clause 1, page 2, line 33, at end insert-

"( ) Before reaching a decision on an application made to him under this section, the Secretary of State must ensure that there has been adequate consultation with the local community."

Photo of Lord McKenzie of Luton Lord McKenzie of Luton Shadow Spokesperson (Work and Pensions), Shadow Spokesperson (Communities and Local Government)

My Lords, this amendment is entirely consistent with Amendment 13, which I trust I will be able to support after it has been spoken to by its mover. Amendment 5 seeks to ensure that, when an application is made to the Secretary of State under the provisions of the Bill, there must, nevertheless, be adequate consultation with the local community. One of the fears arising from Clause 1 is that it facilitates the bypassing of local planning authorities and, along the way, local communities. It is a rerun of a Committee amendment because we considered that the matter was not fully resolved at that stage.

The Minister at that time asserted the intention that all current statutory requirements on local authorities would be transferred to the Planning Inspectorate, including requirements around publicity and consultation. Perhaps the noble Baroness will remind us this afternoon of the process and timing for this. Notwithstanding that, the concern lingers about the presumption that applications dealt with by PINS will largely involve engagement by means of written representations, with possibly a short hearing to allow key parties to put their views, and that this would not necessarily be typical of major applications to a local planning authority. In moving the amendment, I seek reassurance from the Minister on that point.

Photo of Lord True Lord True Conservative

My Lords, I have an amendment in this group, which the noble Lord, Lord McKenzie, has effectively summarised in the points made. I do not pretend that the specific wording or format is necessarily correct, but none the less the broad principle enshrined in it, and in what the noble Lord has just said, is important. As this process goes forward there will inevitably be fears that a Government-not this one necessarily-may in time use this process to ensure that it is made easier to secure agreement to major developments against the wishes of the local population. It might be feared that that could be done either by having a process that is conducted through written procedures or by a rather cursory appearance from an inspector for a hearing in the local area. In this process, a great deal also goes on in the pre-planning stage. Good developers are these days very active and are often encouraged by local authorities to meet local populations to discuss and undertake consultation, perhaps in relation to what might be the specific local community benefits that come from the development. All those things are best conducted locally, in the place and community where the development will take place and which will be affected by it.

As I said, I do not intend to try to write law that is prescriptive. My noble friend gave some general reassurances earlier, but in both the pre-planning stage and the period in which a planning application is under consideration, it is absolutely essential that the Government leave no suspicion in the minds of the public about their rights, about which they feel ever stronger. Those of us who have the honour to represent people in local authorities know that the people's wish to have their voice heard is greater, not less, as time goes by. I hope that we can hear a very strong reaffirmation from my noble friend that if not the specifics of my amendment, certainly the spirit of it will be written into whatever provision the Government might follow up with as they refine secondary legislation, codes of practice and so on, once the legislation becomes law.

The public must not believe, or have any justification to believe, that there is something herein that makes it easier for development to take place in the teeth of what local people believe to be in their interests. That is not nimbyism; there is a balance in these matters. Giving people a chance to have their day in court and to have their voice heard is extremely important in the principle of securing consent to planning developments, which all of us in this House know that this country will need in the decades ahead.

Photo of Lord Deben Lord Deben Conservative

My Lords, I remind the House that I have declared an interest as someone helping people through a company with sustainable development. It is on that point that I support what has been said. It is not just a question of community not feeling that it is being bypassed, although that is crucial and the gravamen of the whole discussion. We also want to support those developers who do the job properly, as against those who think that there is a short cut.

One of the encouraging things of recent years has been the increasing number of developers who have understood that proper community consultation early on makes their development not only more likely but probably better. Many of them are taking seriously the fact that input from the community can be not an incubus but a considerable advantage. Therefore, I, too, hope that my noble friend will be able to give us an assurance-which I am sure she would wish to give-that this is a mechanism to achieve things which cannot otherwise be achieved, rather than a mechanism to make easier to achieve things that should not be achieved and would otherwise be stopped. That is the distinction that we are trying to draw.

My concern in respect of developers, therefore, is that we do not want the less good to triumph over the good. Moreover, as my noble friend Lord True rightly pointed out, we do not want the public to feel that they are being railroaded about things in which they are increasingly interested. We in this House ought to remind people that this is not some evanescent view that will disappear. People will increasingly want to have control over what happens in their own area; that is why we had the Localism Bill. It is also true that, as the world outside becomes more and more complex and people feel it is more and more difficult to decide on how they will have some control over energy policy, the European Union, the work of the United Nations and all the rest of it, localism-the concept of at least having some real control over the area around you-becomes a greater demand rather than a lesser one. This is a crucial moment in this Bill, and the ability of my noble friend to reassure the House is of great importance.

Photo of Lord Tope Lord Tope Liberal Democrat 4:45 pm, 27th February 2013

My Lords, my noble friend Lord Shipley and I have added our names to Amendment 13, to which the noble Lord, Lord True, has spoken. I strongly echo all that he has said; indeed, I think we find ourselves so much in agreement that our respective council groups will be getting very alarmed by our togetherness. I will not repeat what he has said or what the noble Lord, Lord Deben, has said, with which I also strongly agree.

I want to use this amendment and this opportunity to return to the position in Greater London, about which I spoke in Committee. At that time, I pointed out that the Mayor of London-the office, not the post-holder-is responsible for strategic planning in London; that the mayor is elected and democratically accountable both to the elected London Assembly and to the electorate of London; and that if any London planning authority was unfortunate enough to find itself designated, it would surely be far more appropriate and satisfactory for the Mayor of London to take the place of the Planning Inspectorate, with his far greater level of local London knowledge.

In reply, the Minister, the noble Lord, Lord Ahmad, said:

"We gave the reassurance that applications of potential strategic importance would be notified to the mayor very quickly once they had been received by the Planning Inspectorate, so that he will be able to act immediately should he wish to intervene".-[Hansard, 22/1/13; col. 1101.]

He described that as a more practical approach than having the mayor, in effect, taking the place of the Planning Inspectorate in London. That sounded reasonable and reassuring in theory, but I want to use this amendment to understand better how it is intended that that would work in practice. Will it happen through regulation or through some form of gentleman's agreement -and who knows, one day the mayor might not be a gentleman? To what extent will the mayor be able to take responsibility for dealing with the appropriate applications in London when an authority has been designated and, if it is still PINS, what notice will PINS take of what the mayor, with that responsibility, has to say?

I think the Minister is aware that I was going to raise these points. I seek clarification for me, the mayor and the mayor's office, who are similarly not sure whether or not to feel reassured.

Photo of Baroness Hanham Baroness Hanham The Parliamentary Under-Secretary of State for Communities and Local Government

My Lords, I hope I can be reassuring on all the aspects that have been raised. We are fully aware of the necessity to ensure that residents and local communities are involved in any planning application. In any planning application process, effective community involvement is essential. It is a priority that we have been pursuing vigorously through the various planning reforms.

In Committee, I tried to be clear that we will ensure, through secondary legislation, that there is no reduction in the rights of communities to become involved where applications are made directly to the Secretary of State. Let me go into that a little further. There will be no dilution of the legislative safeguards to enable communities to become aware of applications made to the Secretary of State, to comment on them and to have their views taken into account; nor will any less weight be given to their views on the planning issues involved.

Indeed, the existing primary legislation will require a planning inspector, when making a decision on such an application, to take all material considerations into account, just as a local planning authority would. The decision would have to be made in accordance with the development plan unless there are any material considerations that indicate otherwise. Again, that is no different from the approach that a local planning authority would have to take. The local authority will, of course, be able to put its own representations to the Planning Inspectorate with regard to the application.

It was a major element of the Localism Bill that there should be pre-planning discussions, and we expect those to take place as well. This is not a fast process from that point of view. You would expect pre-planning discussions to take place before the application was lodged, because otherwise they are not worth having. That aspect will still continue. We are trying to ensure that the important protections in town and national planning policy are taken fully into account, whether the decision is made by a planning inspector on behalf of the Secretary of State or by the local planning authority.

Through secondary legislation, we will ensure that the relevant documents for applications made directly to the Secretary of State are made available at the offices of the local planning authority as well as on the planning inspector's website. I can also confirm that our intention is that there should be short local hearings. The noble Lord, Lord Tope, asked whether hearings and discussions would be held to consider the views of key parties where a case has raised issues that should be considered in public. I hope noble Lords will understand that we are very anxious that local communities are not excluded from this process and that it is as transparent, as it would be were the local planning authority dealing with it.

My noble friend Lord Tope raised the question of the Mayor of London. Schedule 1 allows the Mayor of London to retain his ability to call in any applications of potential strategic importance for the capital where an application is made directly to the Secretary of State. To ensure that the mayor is made aware of any such application as swiftly as possible, the Planning Inspectorate will make an immediate assessment of whether any application it receives falls into this category. If it does, it will notify the mayor's office without delay and he can then decide whether he needs or wants to call in the application for his own decision. I hope that addresses the point made by my noble friend.

The Town and Country Planning Act makes specific provision for parish councils to be notified of proposals in their area. It was a point made by the noble Earl, Lord Lytton, and the noble Lord, Lord Greaves, neither of whom are in their places today. I reassure them that parish councils will have to be notified of proposals in their area where they have notified the planning authority that they wish to be kept informed. It is voluntary as far as they are concerned.

I have two amendments in this group. Amendment 17 responds to the point made by the noble Earl, Lord Lytton, which I have just discussed, and will make it a statutory requirement for the Secretary of State to inform parish councils of any applications that affect them, provided that they have asked to be notified of the applications, which seems reasonably fair. Amendment 19 makes a minor consequential change to Schedule 1.

In the light of what I have said, while I understand and sympathise with the intention behind the amendments put forward by the noble Lords, Lord True, Lord Tope, Lord Shipley and Lord McKenzie, and spoken to very supportively by my noble friend Lord Deben, I do not think that these additional changes are necessary to ensure that effective community involvement is seriously taken into account where applications are made to the Secretary of State. As I have said, we will ensure that secondary legislation requires the same degree of consultation with communities as secondary legislation, which sets out the requirements that apply when applications are made to the local planning authority. We will of course ensure that the House has an opportunity to consider the secondary legislation that deals with these matters when the time for that is ripe.

With those assurances, I ask the noble Lords not to press their amendments.

Photo of Lord McKenzie of Luton Lord McKenzie of Luton Shadow Spokesperson (Work and Pensions), Shadow Spokesperson (Communities and Local Government)

My Lords, I thank the Minister for her response and for moving her own amendments. Clearly we support the government amendments and their provisions for the notification of parish councils. I have already indicated my support for the amendment tabled in the name of the noble Lords, Lord True and Lord Tope. I believe that the Minister has satisfied us about the legislative framework under which the Planning Inspectorate will be required to consult to make residents aware and to ensure that their views are taken into account, whether by primary legislation or by secondary legislation that is to come.

However, nervousness remains over whether the Planning Inspectorate's approach will involve engaging with the intensity with which a local authority would, and whether its connection with the local community is as intense and engaged as that of a local planning authority. I suppose there is no way of getting greater assurance on this point until we see what happens in practice. The noble Lords, Lord Deben and Lord True, made a point about the era that we are in. Local people now have a much greater focus, and the entitlement to engage in these things is important. However, I do not think that we can second-guess what might happen; we will have to see in practice what the level of engagement is.

I hope the noble Lord, Lord Tope, has been satisfied on the mayor's position. That said, I beg leave to withdraw the amendment.

Amendment 5 withdrawn.

Amendment 6 not moved.

Amendments 7 and 8

Moved by Baroness Hanham

7: Clause 1, page 2, line 44, at end insert-

"62B Designation for the purposes of section 62A

(1) An authority may be designated for the purposes of section 62A only if-

(a) the criteria that are to be applied in deciding whether to designate the authority are set out in a document to which subsection (2) applies,

(b) by reference to those criteria, the Secretary of State considers that there are respects in which the authority are not adequately performing their function of determining applications under this Part, and

(c) the criteria that are to be applied in deciding whether to revoke a designation are set out in a document to which subsection (2) applies.

(2) This subsection applies to a document if-

(a) the document has been laid before Parliament by the Secretary of State,

(b) the 40-day period for the document has ended without either House of Parliament having during that period resolved not to approve the document, and

(c) the document has been published (whether before, during or after the 40-day period for it) by the Secretary of State in such manner as the Secretary of State thinks fit.

(3) In this section "the 40-day period" for a document is the period of 40 days beginning with the day on which the document is laid before Parliament (or, if it is not laid before each House of Parliament on the same day, the later of the two days on which it is laid).

(4) In calculating the 40-day period for a document, no account is to be taken of any period during which-

(a) Parliament is dissolved or prorogued, or

(b) both Houses of Parliament are adjourned for more than four days."

8: Clause 1, page 2, line 45, leave out "this section" and insert "section 62A"

Amendments 7 and 8 agreed.

Amendment 9

Moved by Lord Judd

9: Clause 1, page 3, line 1, at end insert-

"(e) the National Parks Authorities; and

(f) the Broads Authority."

Photo of Lord Judd Lord Judd Labour 5:00 pm, 27th February 2013

My Lords, perhaps it is appropriate at this stage in our proceedings that I remind the House that I am a resident of a national park, a vice-president of the Campaign for National Parks and a patron of the Friends of the Lake District.

In Committee, my noble friend Lord Adonis very powerfully put on the record how well national parks had done in planning matters. Rereading what was said at that stage of our deliberations, it does not seem to me that the Government tried to refute the case that he put forward so convincingly. I am not altogether clear about what the rationale is for the specific exemptions listed in the Bill. Why these alone in the Bill? What is really the case for them? I hope that, in dealing with what I am about to say, the Minister may have an opportunity to leave the House wiser on this point.

If there are to be exemptions, I believe most strongly that the case of the national parks is outstanding. Why? Repeatedly since the parks were originally created in the post-war era, successive Governments of different persuasions have put on the record their determination that these parks are very special parts of the United Kingdom. To those who would say that this is an emotional argument and not a practical one, I would say-I made this point in Committee-that that is utter nonsense, because a healthy, effective nation needs space to regenerate physically and mentally and the parks make a direct contribution therefore to the well-being and operational efficiency of the nation.

We all want economic development-it would be hypocritical to pretend otherwise; I certainly want it-but these very special areas must be protected in the context of our commitment to still better economic performance, because they contribute to the well-being of society and help to underpin the whole nature of the society that we are trying to achieve our by our economic performance. Economic performance cannot become an end in itself; economic performance is so that we can have a decent United Kingdom, and these special areas are absolutely central to that.

It is important to recognise that we in both Houses of Parliament have had a very important role as guarantors of this reality. Since the national parks and the Broads were established, it has been recognised not only by government but by Parliament repeatedly that they are the most important areas for natural beauty and for the opportunities they provide for public understanding of their special qualities. The Government's national parks circular of 2010 explains why it is important for national park authorities to retain a planning function in order to deliver these statutory functions. The Government's National Planning Policy Framework restates that they are to be afforded the highest levels of protection and that major developments within or affecting a national park therefore need to be given very careful consideration.

Of course, a national park authority is highly likely to receive far fewer major applications for development than other planning authorities. A consequence of this is that the percentages for major applications determined within 26 weeks, and the percentage success rates on appeals-the criteria which are proposed by the Government for determining poorly performing authorities-can shift quite markedly from one year to another. The Government's Planning Guarantee Monitoring Report, published in September last year, highlights that six national park authorities received three or fewer major applications in 2011-12 and that, of those, two received only one application. This surely demonstrates that the statistical problem of relying on percentages as far as they relate to national parks is a dangerous game. I recognise that the Government have issued a consultation paper that deliberates on the criteria they will use to determine poorly performing authorities. Although the period over which this is to be assessed seeks to address large variations from year to year, it is important to understand that this potentially raises very serious considerations for the parks.

Before I conclude I shall go over the basic statistical realities again. Leaving to one side the South Downs National Park, which was designated during the year in question, in the year ending 2012, the eight national park authorities and the Broads Authority received 5,000 planning applications. They granted approval for 89% of applications, which is higher than the English average of 87%. They received 53 applications for major development, of which 91% were granted approval. For major development, national park authorities compare favourably with other local planning authorities for speed of determination. They approved 60% of applications within 13 weeks, compared with the English average of 57%. It is absolutely clear to me-and I would have thought to everybody-that the national park authorities have a good track record in planning performance and a number are, for example, part of the Government's front runner programme for promoting neighbourhood planning. If there are to be exemptions, I urge the Minister to look seriously at whether, even at the final stages of consideration of the Bill, she could include the national park authorities alongside the other designated authorities, although, as has been said, it would helpful if we could have a bit more information on the overall rationale for the authorities mentioned in the Bill.

This is an important issue. It is important to keep the factual side under consideration all the time. However, I am not ashamed to say that it would be very easy to introduce a new culture in which the parks have to justify their existence rather than anyone who wants to undermine their special character having to justify why they are doing that. When we introduce legislation of this kind, it is crucial to remember that we are dealing not only with the Ministers of the day. I am convinced that the Ministers of the day are quite civilised on these issues. They have a very enlightened approach. They want to help, I think, in many ways. That is encouraging, but they might not always be there. Another Minister coming along could very easily see this as the thin end of the wedge and that the door was being pushed open, opening up all sorts of new opportunities which could very easily lead to the complete destruction of the special nature of the parks. I beg to move.

Photo of Lord Deben Lord Deben Conservative

My Lords, I hope very much that my noble friend will resist this proposition. It seems to me to be really unacceptable. If it is necessary to have a fallback power for circumstances in which it is necessary to take to the centre decisions that would otherwise be done locally, I find it very difficult to understand why the national parks should be excluded.

There are two reasons for that. First, it says something about everybody else. It says that those people are perfectly safe, but the other people have to be subject to this rule. Speaking on behalf of everybody else, I do not think that that is a very good argument. Secondly, I was Secretary of State responsible for these matters, and I can think of one national park which ought to have been under this rule for quite some time, because its planning attitudes at the time were utterly indefensible. It is no good saying that they are always perfect. If what the noble Lord, Lord Judd, says, is true-I am sure that it is-and the national parks have a remarkable record over recent years because of the fantastic speed with which they deal with plans, nobody will do that to them. If the record is as good as that, they will be the last people to be subject to this.

I have to say to the noble Lord, Lord Judd, that I find it difficult to believe in the infallibility of the national parks. Indeed, I have good reason to believe that we have made a huge mistake in making the South Downs a national park. I have opposed that all my life; I still think that it has been a disaster; it is not what should have been done and it has alienated local authorities in areas where it would be much better for them to have worked as they had worked before. I think that the same is true of the New Forest. That was an historic, political decision to do with the 1930s rather than anything to do with the 2000s, but there we are: we have done it. It has not been as damaging as it might have been, but it was not sensible.

National parks do a wonderful job. They are a fantastically important part of our structure. I think I have a long enough record of defending the countryside and working for country people and the nature of the British rural society not to be maligned by the suggestion that in some way I have a wicked desire to concrete over the countryside. Indeed, I have been pretty critical of the Government's proposals on the basis that I do not think that it is necessary to build on greenfield sites. I happen to think that we can build all the housing we need on brownfield sites. It is an easy way out for developers to build on greenfield sites. They must be forced to build on brownfield sites because otherwise all they will do is build on greenfield sites and then wait until they have more greenfield sites. That was my experience from four years as Secretary of State. I hope that no one will criticise me for that.

If we are to have the clause-I have shown myself to be not altogether happy about the need for it-it must cover national parks and the Broads Authority like everybody else. It is hemmed around with all the Minister's careful comments-she has been very clear that it would not be used except in certain extreme and specific circumstances. She has laid down some new mechanisms by which we can receive greater comfort about it. I still wonder in my heart whether it is utterly necessary, but, having done all that, it would be preposterous to leave the national parks out. It would be extremely rude to some other excellent local authorities, who will never be affected by the regulations because they, too, do the job as well as a national park.

I hope that my noble friend will resist this elegant, polite, romantic proposal, which the House should not support.

Photo of Lord Liddle Lord Liddle Opposition Whip (Lords), Shadow Spokesperson (Foreign and Commonwealth Affairs) 5:15 pm, 27th February 2013

I did not intend to intervene in this debate. I normally find myself in agreement with the noble Lord, Lord Deben, on most issues and I greatly respect his record as a supporter of what one might call green policy. However, on this occasion, I speak declaring an interest as a Friend of the Lake District and believing that special circumstances relate to national parks which make them different from other local authorities. I saw this first-hand in my capacity as chairman of Cumbria Vision, the sub-regional body of the North West Development Agency, which was responsible for promoting economic development in Cumbria.

There are two fundamental differences. First, the people who work on national parks go into it with a very strong personal commitment to planning. I found the quality of staff working for the national park authority to be extremely high. That was not true of planning in all the other district councils in the county of Cumbria. I will not name names, but there were some problems there on the planning side. There were not, however, problems with economic development with the national park, which had a very constructive role in sustainable economic development.

The second difference, which is a fundamental difference from a local authority and the question of a Secretary of State's potential call-in powers, is that with a national park the Secretary of State nominates quite a high proportion of the members of the authority. Therefore, if the Secretary of State believes that the national park is not getting the balance between development and the environment right, he or she can nominate members. That is my simple point. I shall give way.

Photo of Lord Deben Lord Deben Conservative

I thank the noble Lord for taking the opportunity to find a disagreement between us because we are both singularly embarrassed by the similarity of our views on a whole range of issues, from Europe to planning. However, if what he says is true, would it not be very surprising to get rid of people whose normal attitudes were extremely good but, because of something specific, things had gone wrong? Surely it would be much more sensible for the Secretary of State to be able to deal with this with a precise measure, rather than a sacking. As I understand it, these people are under a contract for a period of time and the Secretary of State would have to wait some time to remove them if they were so wrong. However, I understand from his noble friend that they very rarely get it wrong.

Photo of Lord Liddle Lord Liddle Opposition Whip (Lords), Shadow Spokesperson (Foreign and Commonwealth Affairs)

In my experience, they very rarely get it wrong. My point was simply that if the Secretary of State felt that the overall balance of the way a national park was operating was not right, there is a remedy available to him or her, which is not the case for a local authority. Anyway, I would urge a special provision for national parks because, on the whole, they are a very precious element of our polity, introduced by the post-war Labour Government, and I do not think we want to tamper with them and their independence.

Photo of Baroness Garden of Frognal Baroness Garden of Frognal Lords Spokesperson (Department of Business, Innovation and Skills), Baroness in Waiting (HM Household) (Whip)

My Lords, I remind noble Lords that we are on Report and, under the convention in the Companion, no Member may speak more than once to any amendment.

Photo of Lord McKenzie of Luton Lord McKenzie of Luton Shadow Spokesperson (Work and Pensions), Shadow Spokesperson (Communities and Local Government)

My Lords, I speak in favour of Amendment 9 in support of my noble friend Lord Judd, who so effectively and passionately introduced it. He argues for the inclusion of the national parks authorities and the Broads Authority in those organisations that cannot be designated.

A major concern with this Bill is that it will drive down standards-that, because of the focus on timing in the criteria that are to be adopted, planning authorities will be pushed into making less considered decisions, eschewing quality for speed. That is something that runs through our concerns about this clause. As the CPRE states, exempting those particular planning authorities would be a clear recognition that landscape considerations are paramount and that they need not be distorted by the extra pressures that are coming through, as a result of this clause, on the speed of decision-making and, of course, to avoid contesting more difficult appeals.

My noble friend Lord Judd was fantastically supported by my noble friend Lord Liddle, with his direct experience of national parks. I say to the noble Lord, Lord Deben, that the fact that my noble friend's proposal is romantic should not preclude it from being supported. It can be effective and practical, as my noble friend argued, as well as having romanticism. I would have thought that that is what we want from our national parks.

Photo of Baroness Hanham Baroness Hanham The Parliamentary Under-Secretary of State for Communities and Local Government

My Lords, I thank noble Lords for their interesting interventions on this interesting amendment, which we discussed in Committee. I am not going to endear myself to the noble Lord, Lord Judd, by saying that my answer now is the same as it was then. My noble friend Lord Deben said that he can see no reason for excluding national parks from designation just because they are national parks; nor can we. That also applies to the Broads Authority. The reason for keeping them included is that they are planning authorities. If they perform wonderfully and at a standard that I think the noble Lord said they would, this registration will not matter to them at all. It would completely leave them out to carry on doing what they are doing so beautifully. There might be authorities which fall into this category only if, as my noble friend Lord Deben suggested, they do not perform to the designated standard. They would then become involved.

It is important that national parks are served by an effective planning service. That applies just as much to them as to any other area. They are asked from time to time to put in major developments-we call them major if they are of 10 houses or more-and it is absolutely essential that there is within those areas a planning authority that understands what it is doing and makes those decisions carefully. There are some national parks that deal with a relatively small number of major applications, but some do not. The noble Lord, Lord Judd, cited figures, some of which would, I think, fall below the major applications category. I understand that the Lake District made decisions on 31 major applications in the past two financial years, while the New Forest dealt with 23 and the Broads Authority with 18. For those authorities, those are not inconsiderable numbers.

The noble Lord, Lord Judd, asked why national parks and the Broads Authority should not be included among others which had not been designated, such as the Mayor of London and the development corporations. However, these are by and large not normal planning authorities. Certainly, the development corporations get involved to deal with only very big or complex proposals and do not deal on a day-to-day basis with some of the smaller ones.

It is true that other national parks deal with fewer major applications, but the two-year assessment period that we have proposed is designed to even out some of the fluctuations. It is also important to remember that these authorities will be able to enter into planning performance agreements or agree an extension of time where there are issues that will take additional time to resolve, which may be germane only to their particular type of application. There should be no worries that if a national park or the Broads Authority were to be designated, that would result in decisions that pay less regard to their special qualities. If, in these circumstances, an application for major development were to be made to the Secretary of State, the decision would have to be in accordance with the same statutory principles that apply to the designated authority. Indeed, I expect that they would also be able to access the help of the Local Government Association.

In other words, there would be the same legal obligation to make decisions in accordance with the development plan, unless there are material considerations that indicate otherwise. The Secretary of State will also be under a statutory duty to have regard to the purposes for which the national park has been designated in making such decisions. I listened carefully to the noble Lord, Lord Liddle. I am enchanted by the fact that the national parks have such good people, but that is not what this is about. If they have really good people they are making really good decisions, so they are not in any jeopardy of being designated.

I will resist the amendment and hope noble Lords will understand that, as recognised planning authorities, neither the national parks authorities nor the Broads Authority should be exempt. The communities and businesses in their areas deserve the same standards of service on planning as the rest of the country. I hope the noble Lord will withdraw his amendment.

Photo of Lord Judd Lord Judd Labour

My Lords, I thank the Minister for the characteristically friendly candour with which she has replied. I am sorry that she has replied in the way that she has at this stage; it is rather disappointing. She referred to the complexity of the issues facing the bodies that appear in the Bill. However, I would argue that what faces a national park authority is every bit as complex, every bit as difficult and sensitive, as what faces these authorities. They are in a very special category in that context because of these wider issues of the inheritance, the special role of the parks and all the rest. Her argument about complexity strengthens the case for the park authorities being in the Bill.

I must say a word about the contribution by the noble Lord, Lord Deben. I take second place to no one in my admiration for the tremendous contribution he has made on a lot of green issues in this country. I really do regard him with some awe for the way he has stood up on a number of issues. This makes it doubly disappointing that he said what he said. Why? First, it is not the first time I have heard, almost word for word, that particular contribution by the noble Lord, Lord Deben, on national parks. I do not suppose it is the last time we will hear it, either. He clearly once had a very bad night with some of the national parks. I am not quite sure what this bad night was and I would value him putting the story straight with me in the bar one night.

I am sorry if he was left wounded for life, but if he is raising the issue that I am falling back on a generic argument when there are specific examples, why does his argument not apply to the Homes and Communities Agency? Why does it not apply to the Mayor of London or to a mayoral development corporation? Why does it not apply to an urban development corporation? Is he really saying there will not be variations there, or moments of good performance at some times and not such good performance at others? I do not understand the logic of his position. If you accept that there will always be variations but that, notwithstanding those, there are some that have such great responsibilities and complex-to use the Minister's word again-issues to deal with that they have to be in the Bill, then these unique and special parts of our national parks' life really should be there alongside the others. Not to include them is to demean them.

If it were not for people who refuse to take no for an answer-those right across the political divide in the 1930s and 1940s who kept going with their arguments, belief and purpose in establishing the parks-we would never have had them. I do not give up. I believe in the power of reason, the power of reflection, the power of decency and the civilised values that I know the Minister shares. If I am to withdraw the amendment at this stage, it is in the real hope-not just as a debating formality-that she will go away with her colleagues, look seriously at this issue again and see if there is some way she can bring meaningful reassurances to this House at Third Reading. In the mean time, on that basis, and in thanking those who have spoken to this amendment, not least my own Front Bench, I beg leave to withdraw.

Amendment 9 withdrawn.

Amendment 10 not moved.

Amendments 11 and 12

Moved by Baroness Hanham

11: Clause 1, page 3, leave out lines 4 to 7

12: Clause 1, page 3, line 8, leave out "this section" and insert "section 62A"

Amendments 11 and 12 agreed.

Amendments 13 to 15 not moved.

Amendment 16

Moved by Lord McKenzie of Luton

16: Clause 1, page 3, line 10, at end insert-

"( ) The Secretary of State shall arrange for an independent review into the impact of the operation of this section on local authorities to be undertaken at the end of a three year period from the date that this section comes into force, and shall lay a report before each House of Parliament."

Photo of Lord McKenzie of Luton Lord McKenzie of Luton Shadow Spokesperson (Work and Pensions), Shadow Spokesperson (Communities and Local Government) 5:30 pm, 27th February 2013

My Lords, I shall be brief. If Clause 1 stays in the Bill, and we hope that it does not, then there is a need for an independent review of its impact. I acknowledge at the start that the wording of this amendment could be improved, as it should focus not just on the impact on local authorities but on the effectiveness of the planning system as a whole, including from the perspective of developers. However, if necessary we can tidy this at Third Reading.

Clause 1 introduces a significant change into the planning system. Subject to later deliberations, we could be giving the Bill approval without the Government's clear and definitive position on some key aspects-certainly, their response to the planning performance consultation, although the Minister gave us some glimpses of where the Government are on that. We accept that there are obviously more general opportunities for parliamentary scrutiny, such as the Select Committee, but we assert that this requires an independent review. Will the Minister give us any assurance about what follow-up is planned to the Bill generally, but specifically to Clause 1 and its impact, and whether the Government would support such a review? I beg to move.

Photo of Baroness Hanham Baroness Hanham The Parliamentary Under-Secretary of State for Communities and Local Government

My Lords, I have no difficulty with the suggestion that we should keep the implementation and impact of this measure under review, but that is not something for which we need legislation. We set out in the impact assessment that, as usual, we will undertake a post-legislative review of the provisions in the Bill three to five years after Royal Assent. This reflects the Cabinet Office guidance on post-legislative scrutiny, which requires that three to five years after Royal Assent the department must submit a memorandum to the relevant Commons departmental Select Committee, published as a Command Paper. This will include a preliminary assessment of the effects of the Bill. Furthermore, the data on local planning authority performance will be published on a quarterly basis and an annual basis, in line with our commitment to transparency. This will allow anyone with an interest to see how planning authorities are performing and, together with the decisions about dedesignation, it will form a view of the impact that the measure is having. The noble Lord's amendment is not necessary, as this is certainly something that will be kept under close scrutiny. Under the circumstances, I hope that he will feel able to withdraw his amendment.

Photo of Lord McKenzie of Luton Lord McKenzie of Luton Shadow Spokesperson (Work and Pensions), Shadow Spokesperson (Communities and Local Government)

My Lords, I thank the Minister. I anticipated that that was what she might say in response to this amendment. The only thing that I would say about post-legislative scrutiny, which I certainly support as a concept, is that it does not necessarily introduce this independent aspect of the scrutiny. Still, I wanted to get on the record what the Government planned as a follow-up to the Bill, and the Minister has helped us with that. I beg leave to withdraw the amendment.

Amendment 16 withdrawn.

Amendment 17

Moved by Baroness Hanham

17: Clause 1, page 3, line 10, at end insert-

"62C Notifying parish councils of applications under section 62A(1)

(1) If an application is made to the Secretary of State under section 62A(1) and a parish council would be entitled under paragraph 8 of Schedule 1 to be notified of the application were it made to the local planning authority, the Secretary of State must notify the council of-

(a) the application, and

(b) any alteration to the application accepted by the Secretary of State.

(2) Paragraph 8(4) and (5) of Schedule 1 apply in relation to duties of the Secretary of State under subsection (1) as they apply to duties of a local planning authority under paragraph 8(1) of that Schedule.

(3) An authority designated for the purposes of section 62A must comply with requests from the Secretary of State for details of requests received by the authority under paragraph 8(1) of Schedule 1.""

Amendment 17 agreed.

Amendment 18

Moved by Lord McKenzie of Luton

18: Clause 1, leave out Clause 1

Photo of Lord McKenzie of Luton Lord McKenzie of Luton Shadow Spokesperson (Work and Pensions), Shadow Spokesperson (Communities and Local Government)

My Lords, this amendment would remove Clause 1 from the Bill. I acknowledge that the Government have moved a little in agreeing to a parliamentary process of designation of a supposed failing authority, but that does not outweigh the overriding concerns that remain about the clause. The right for developers to bypass the local authority planning process when an authority is designated is a profound one. Not only is it a centralist approach, quite contrary to the espoused localism of the Government, but it breaks a major tenet of our planning system that democratically elected local politicians representing their communities are at the heart of the system.

We accept that not all local planning authorities deliver a top-quality service, no more than do central government. Developers who are frustrated by this have a remedy to go to the Secretary of State for non-determination within fixed deadlines. But we should be mindful of the burden placed on the Planning Inspectorate also by this clause, which already includes the work of the abolished Infrastructure Planning Commission, the examination of local plans and the examination of the draft Community Infrastructure Levy charging schedules.

I am mindful too of the awful budgetary position of many local councils facing major cuts in resources and increasing pressure on services. If local authorities need incentives to encourage development, is that not what the business rate retention scheme was meant to be about and the new homes bonus designed to ensure? Notwithstanding that, there is a proposed basis for having parliamentary oversight; the reality is that designation criteria will be rigid, relating to the number of major applications dealt with and the numbers of major decisions overturned on appeal.

The Government seem to intend that the bar will be raised in subsequent years- this was in the consultation document. This process of designation completely overlooks the fact that timeliness of dealing with applications is not just a matter for the local planning authority. It is influenced by a number of factors: the attitude of the developers, the response times of statutory consultees, the outcome of consultation, the bunching of applications. Although formal and informal agreements with developers to extend the timeframe will be reflected in the designation criteria, it seems there will be room for no other considerations to be taken into account. So it seems that there is no process for making meaningful representations.

The Government line is that designation will apply only to very few authorities, that they will know in good time and can do something about it. But from the Minister's comments at a meeting the other day, it seems that the numbers are already creeping up and we do not know precisely what the starting or follow-on criteria will be. A parliamentary process helps, but we know full well that statutory instruments cannot be amended. Designation will be counterproductive for an authority which has been through a bad patch and has an improvement plan under way. What are the chances of recruiting experienced quality staff when major applications are likely to head off to the Secretary of State?

The Government should be troubled by what they have heard consistently throughout our deliberations. It is also very clear that there is not strong support from all responses to the consultation. The overriding concern is that, if Clause 1 survives, local planning authorities will be more likely to approve applications with which they would generally not be happy, just to meet a deadline. Quality will be sacrificed for speed and communities will have to live with the long-term consequences. This clause needs to go. I beg to move.

Photo of Lord Beecham Lord Beecham Shadow Spokesperson (Communities and Local Government), Shadow Spokesperson (Justice)

My Lords, I endorse my noble friend's amendment and refer for the third or fourth time to what used to be available to local authorities in the form of planning development grant to improve and sustain the capacity of planning departments, which now, like every other local government department, have come under severe pressure due to increasing financial constraints. Will the Minister turn her mind to capacity and how the Government can assist, possibly by restoring some form of planning development grant? They need to ensure that the necessary staff are available with the necessary skills in order to facilitate the speedy, but thorough, examination of planning applications, which is what she, the Government and the Opposition very much wish to see.

Photo of Lord True Lord True Conservative

My Lords, I am certain that my noble friend will not succumb to the blandishments of the noble Lord, Lord McKenzie. In a way, reluctantly, I have to say that from my feelings at Second Reading, I think that she would be right to resist his temptations. This Bill as it started, as many of us said, was very broadly drafted, and in many areas it threatened to enable a degree of centralism that was unacceptable and went against what this House had recently argued for. I always accepted that there should be some kind of backstop provision on Clause 1. I was not one of those at Second Reading, as I have reminded the House, who opposed it in principle.

The powerful and eloquent arguments of the noble Lord, Lord McKenzie, among many others made in this House, have contributed to changes in this clause, which he was generous enough to acknowledge earlier. After the way in which the Government have moved, it would be strange if we now seek to excise the clause. However, I say to my noble friend from these Benches that we will want to watch carefully, and with a mild degree of scepticism, the way in which this clause may or may not be used in the future. I certainly welcome what she had to say on the previous amendment about keeping the matter under review. I hope that the House will not follow the tempting voice of the noble Lord, Lord McKenzie, into suggesting that this clause, as it has been amended, should go, although there is still much yet in this Bill that needs to be dealt with.

Photo of Lord Judd Lord Judd Labour

My Lords, I hope that my noble friend will stand firm. If legislation is important and necessary, it seems to me a first principle that it is important to get it as right, sound and well drafted as possible. I honestly believe that there is room for reflection on how this clause has been drafted. It is full of lurches in administration which are not logically followed through and which introduce contradictions between what is recognised and put on the face of the Bill, and what is not put on the face of the Bill. That is one area of concern.

A much deeper area of concern is the contradictions which this Bill epitomises between the legislation of the Government and their aspirations as put to the people in the general election and at other times. The whole thesis of the Conservative position was that power should be nearer people; that the bodies nearer people should have more authority than they had before; and that there should be distribution of power. Phrases such as "Trust the people" are ringing in my ears. This clause is very central to that.

However, we are moving into an age in which you do not say that ultimately the state has responsibility in a whole range of administration-of course it does -or that we therefore want to enhance and improve the local standards of democracy and the local and more regional ways in which planning and the rest are working. We are moving into an age where the state may say, "We concede that you may be able to get on with the job administratively here but please understand that the real power lies at the centre, and at any point we can intervene and call into the centre the responsibility for what is being done". How does that add up in terms of the message that was being put to the British people about the belief in the people and the rejection of the concept of overcentralised government? There is a contradiction here. Therefore, I believe that my noble friend was absolutely right to propose the deletion of this clause. I warmly applaud and support him.

Photo of Lord Deben Lord Deben Conservative 5:45 pm, 27th February 2013

My Lords, I remain uncertain as to the value of this clause but I am clear that the Government, particularly my noble friend, have done a great deal to allay the real and immediate anxieties that we have had. I am sad that the Government put her in this position. The changes that she has made could perfectly well have been part of the Bill in the first place. There are other things in it on which I am not sure that we have yet reached the kind of accommodation that will be necessary if they are not to do serious harm. We shall come to those later.

This is now a better clause after the assurances and changes that have been made. The clause to which the noble Lord, Lord Judd, has jut referred is the clause with which we started. We are not discussing that but one that has been amended and clothed by the explanations and references that the Minister has put before us. I hope that others will recognise the sterling work that she has done to get us into this position and perhaps in future we can be a little more careful about how we produce the Bill in the first place. Many of our discussions could have been prevented, in the proper sense of that word, by more care in its drafting and with thought over how one proceeds in a House with sufficient numbers who do not speak from a party political point of view but who have some experience of how these things work out in practice. I hope that this may serve as a warning and a reminder that Bills carefully prepared at the outset are less likely to take time to pass through.

Photo of Lord Tope Lord Tope Liberal Democrat

My Lords, I am inclined to agree with the noble Lord, Lord Deben, but then to speculate that if that perfect world existed what function would we be left with?

Three months ago I would have had little, probably no, hesitation in joining the noble Lord, Lord McKenzie. When first published, this clause was really the antithesis of localism, which we spend so much time debating. It was clearly centralist and unsatisfactory. Even after some welcome reassurances on Report in the other place, at Second Reading, I still felt that it was unacceptable.

In moving his amendment, the noble Lord, Lord McKenzie, acknowledged that the Minister had moved "a little", I think his precise words were. That was uncharacteristically ungenerous of him. The Government have moved very substantially on this clause. I have not become an enthusiast for it but I acknowledge that pressure from all sides of this House, some excellent work by the Minister and her colleagues, and other Ministers who have been prepared to listen and hear-to echo my earlier words-have made this clause very much less harmful than it might have been. We have criteria, which will be subject to parliamentary approval, proposed at a very low threshold that, as set now, would catch, if that is the right word, few local planning authorities. We have a process whereby local planning authorities will have good warning of when they are at risk and ample opportunity to improve.

We have heard that that improvement will be sector-led and that the LGA has been in discussions and is prepared to work with local planning authorities at risk and to help them reach the necessary improvements so that they do not become designated. If after all that a local planning authority is performing so badly, it probably deserves to be designated. We are looking at an incentive to improve and not a deterrent to punish. I believe that after the criteria that we have put in place, and the provisos and reassurances that we have had, very few local planning authorities will actually get designated. I understand why the noble Lord, Lord McKenzie, fears that, at least in part, that may in part be because the quality of decision-making is reduced particularly to meet timescales, or, to be less particular, on important issues such as design.

We will have to see, but given how few local planning authorities currently would meet the criteria for designation, I am not too worried about that. If it looks to be the case, we will have to tackle that, but I am not too worried. As I said previously, if at the end of this process the local planning authority is still so bad that it meets the criteria for designation, that may very well be the last resort that has to be taken, but even when we get to designation we should remember that major planning applications will not be required to go PINS; that will be the choice of the developer. The local situation may be so bad that the developer makes that choice, but my guess is that in most cases the developer would still prefer to stay local and stay working with a local planning authority, where by that stage no doubt the relationship would be far from perfect, but there would still be a relationship.

I start to wonder whether this clause-not that it is undesirable-may not be necessary and whether the Planning Minister's hope and aspiration that it will never be necessary to use it may well come about. Like my noble friends, I have been reassured during the process of the Bill and, perhaps unlike the noble Lord, Lord Deben, I am pleased that we have been able to go through the process, although I would rather not have been in that place in the first place. On that basis, I am prepared to accept the Government's wish to have this clause as an incentive not a deterrent to encourage those local planning authorities whose performance is far from perfect-and we all acknowledge that they exist-to improve themselves.

Photo of Baroness Hanham Baroness Hanham The Parliamentary Under-Secretary of State for Communities and Local Government

My Lords, I think my noble friends Lord True and Lord Tope for their encouraging words and for their recognition of the amount of work that has been done in this House-and we should acknowledge the fact that the House has played a very important part in the changes that we have been able to make in this Bill. I understand that there are still real concerns about it, and the noble Lord, Lord Judd, referred again to localism. This is not an issue of localism but of ensuring that local people get a proper planning service and that local developers get a proper result from the applications that they put forward.

This is not a measure that we take lightly. It is something that we are very serious about because we believe it to be both necessary and appropriate. We are very clear-and I want to emphasise this-that planning decisions should continue to be made locally wherever possible but, as I have emphasised throughout our discussions on this clause, we should be prepared to act where standards have fallen to a wholly unacceptable level. Noble Lords will agree that the criteria that they are working to at the moment would constitute being at a wholly unacceptable level. That is no different from the approach that previous Administrations have taken, and I have pointed out how the criteria were adopted by schools, hospitals and other services under previous Governments. We should be prepared to do the same for planning, not least because of the role that it plays in supporting growth as well as being an important community service in its own right.

We listened carefully to the arguments made in Committee, and the amendments that we have brought forward put beyond doubt that this measure can be used only where it is clear that performance is inadequate and that the ability to apply directly to the Secretary of State will be open only to those seeking approval for major development. We have defined that, too. As my noble friend Lord Deben said, the choice of where this application is heard will still be in the hands of the developers; it is their option to go to the Planning Inspectorate if they are not happy having the application heard by a designated council, but they do not have to. They can leave the application and have it heard in the normal way by the council, if that is their choice. I agree, too, that some developers work very closely in particular areas and therefore have a relationship that is wholly proper with their local authorities.

I also indicated that Parliament will have the opportunity to consider again the criteria for designating authorities before they are finalised and before any changes are made to them in future, if they are to be made. By using transparent criteria, with data published on a regular basis, planning authorities will be clear about whether their performance needs to improve to avoid designation, and through the support package that we have been discussing with the LGA we hope and expect that the number of designations in future will be very limited indeed.

Of course, we also anticipate that the mere existence of this measure will encourage timely and well considered decisions by planning authorities and so avoid the need for designations. I do not accept the argument that local authorities will now rush around trying to get planning decisions through in 13 weeks to escape or grind up slightly from the percentage that might hit the criteria. We have made it clear that they do not need to rush; they need to make a very focused effort on plans. If there are reasons why the planning applications cannot go forward in the normal timescale, then the planning agreement signed and agreed between the local authority and the developer will be recognised as the reason why it has taken longer than normal.

For those authorities that are designated, we are clear that we are not removing any powers from them in any way. The Secretary of State is intervening in only a very marginal area.

The noble Lord, Lord Beecham, referred to the planning and development grant. I point out to him, as I am sure he knows, that planning fees have increased by 15%, and there has been an extra contribution to local authorities from that point of view.

I believe that this clause remains a necessary measure, albeit one of last resort. We have put beyond doubt how it may be used, and thought carefully about an approach to assessing performance that is fair, transparent and minimises any risk of perverse outcomes. My noble friends Lord True, Lord Tope, Lord Deben and Lord Judd-well, the noble Lord, Lord Judd, is a friend, but not in this instance-have underlined what I have been saying. There is a need for this, however limited the need may be. I ask the noble Lord, Lord McKenzie, to withdraw his amendment; if he does not and he presses it to a Division, I ask the House to reject it.

Photo of Lord McKenzie of Luton Lord McKenzie of Luton Shadow Spokesperson (Work and Pensions), Shadow Spokesperson (Communities and Local Government)

My Lords, I thank all noble Lords who have participated in the discussion and thank my noble friends Lord Judd and Lord Beecham for their strong support for the amendment.

What surprises me somewhat is the view that people have taken that the clause is now so dramatically different from what it was at Second Reading, when pretty much everyone who spoke in the debate would have preferred to see it out of the Bill. Along the way, I should say that at no stage would I have it said that I had not recognised the important work that the Minister has done on this Bill, and will continue to do.

Let us look at the position. The noble Lord, Lord Tope, said that he thought that the Planning Minister would believe or hope that this provision would not affect anyone at all. At a meeting just the other day that the Minister organised, he said that the number likely to be caught had gone up and that it could be as many as 20. The criteria that are promulgated-we do not yet know what the final criteria will be-have not changed since Second Reading. The 20% and 30% criteria have been consulted on.

The noble Lord, Lord Tope, said that if local authorities are so bad, they deserve what comes their way. It depends how you judge "so bad". Part of the challenge that we have is that the criteria are not necessarily a fair determinant of poor performance because so many other factors influence the timing of approvals and the planning process. If you look at what has changed since Second Reading when people were so unhappy with this clause, you will see that we have the term "major development" in the clause but, at the start of our consideration of the Bill here, the position was always that major developments would be caught by this and that was very clear from debate in the other place. The criteria that were promulgated at that stage have not changed.

We have a parliamentary process but, frankly, the negative procedure is the weakest parliamentary process you can have. We know full well that it is not really possible to change those regulations once they come into force. We also know that the Government are seeking to tighten those criteria in the future. They have consulted on that, although we do not know the extent to which that tightening will take place. It seems to me that very little has moved on this clause that is positive. I accept that there have been assurances around sector support, but even that was promulgated around a concept at the time when we debated this at Second Reading. From my perspective, very little has changed in practice on this clause since the Bill arrived in your Lordships' House. I hear what noble Lords on opposite Benches have said. I am sorry that I have not been able to persuade those who have spoken, but I wish to test the opinion of the House.

Division on Amendment 18

Contents 176; Not-Contents 201.

Amendment 18 disagreed.

Division number 1 Growth and Infrastructure Bill — Report (1st Day)

Aye: 174 Members of the House of Lords

No: 199 Members of the House of Lords

Ayes: A-Z by last name

Tellers

Nos: A-Z by last name

Tellers

Schedule 1 : Planning applications made to Secretary of State: further amendments

Amendment 19

Moved by Lord Ahmad of Wimbledon

19: Schedule 1, page 38, line 37, after "71" insert "or paragraph 8(6) of Schedule 1"

Amendment 19 agreed.

Clause 4 : Permitted development rights for changes of use: prior approvals

Amendment 20 not moved.

Amendment 21

Moved by Lord Ahmad of Wimbledon

21: After Clause 4, insert the following new Clause-

"Local development orders: repeal of pre-adoption intervention powers

(1) The Town and Country Planning Act 1990 is amended as follows.

(2) Section 61B(1) to (7) (Secretary of State or Welsh Ministers may call in unadopted local development order for approval or may direct that it be modified) cease to apply in relation to England.

(3) Accordingly-

(a) in section 61B(1) (power to call in unadopted order) after "local planning authority" insert "in Wales,", and

(b) in section 61B(6) (power to direct that unadopted order be modified) after "local development order" insert "being prepared by a local planning authority in Wales".

(4) In section 61B, after subsection (7) insert-

"(7A) Where a local development order is adopted by a local planning authority in England, that authority must submit a copy of the order to the appropriate authority as soon after the order's adoption as is reasonably practicable."

(5) In paragraph 1 of Schedule 4A (power to specify procedure for preparing local development orders) after sub-paragraph (2) insert-

"(2A) Sub-paragraph (2)(a) applies in relation to England as if for "submission, approval, adoption," there were substituted "adoption, post-adoption submission,"."

(6) In Schedule 4A omit-

(a) paragraph 4 (information about local development orders to be included in English planning authorities' monitoring reports under section 35 of the Planning and Compulsory Purchase Act 2004), and

(b) in paragraph 1(3), the words "35 or"."

Photo of Lord Ahmad of Wimbledon Lord Ahmad of Wimbledon Lord in Waiting (HM Household) (Whip) 6:13 pm, 27th February 2013

My Lords, during the debate in Committee on permitted development rights, a subject to which we shall return on day two on Report, concerns were expressed about the operation of local development orders. In response to those concerns we have brought forward changes to the Town and Country Planning Act 1990 by proposing the introduction of a new clause to the Bill in respect of the operation of the powers in England. These are matters which are devolved in respect of Wales.

The new clause removes current powers for the Secretary of State to intervene in and approve local development orders and for local planning authorities to report on them in England. This will mean local authorities will be able to consult on and make a local development order without the need to send a copy to the Secretary of State for his consideration and approval. Similarly, an authority will not have to report on the effectiveness of the order. Instead the local authority will just have to send a copy of the order to the Secretary of State once adopted.

As we have made clear during previous debates on the planning clauses in the Bill, we are keen to free the planning system from unnecessary constraints to ensure that local planning authorities can focus on the most important planning matters in their area. We welcome that local authorities are also taking strides in this area and want to ensure that they can use local development orders to their maximum benefit to remove barriers. Local development orders provide a quick and simple way to extend permitted development rights locally. The number being put in place across the country is booming. More than 30 local development orders have now been put in place in enterprise zones with more coming through by the month. These orders are contributing to growth by helping to speed up the delivery of everything from small domestic alterations to major industrial development. Having this central knowledge about the local development orders that have been adopted helps to spread good practice and promote their potential.

As we indicated in Committee, we welcomed the interest of my noble friends Lord Tope and Lord Shipley in making the case for greater freedoms for local planning authorities. We are clear that experience and interest in making local development orders is growing rapidly and we want to capture this. I believe that the proposed new clause will both encourage and give confidence to local authorities to be ambitious and bring forward greater planning simplification in their areas. I therefore hope that the House will support its inclusion in the Bill. I beg to move.

Photo of Lord McKenzie of Luton Lord McKenzie of Luton Shadow Spokesperson (Work and Pensions), Shadow Spokesperson (Communities and Local Government) 6:15 pm, 27th February 2013

My Lords, we are content with the amendment.

Amendment 21 agreed.

Clause 6 : Modification or discharge of affordable housing requirements

Amendment 22

Moved by Lord McKenzie of Luton

22: Clause 6, page 6, line 5, at end insert-

"(1A) This section only applies in relation to English planning obligations agreed prior to Royal Assent."

Photo of Lord McKenzie of Luton Lord McKenzie of Luton Shadow Spokesperson (Work and Pensions), Shadow Spokesperson (Communities and Local Government)

My Lords, the intent of the amendment would be to restrict the application of the provisions relating to modification or discharge of affordable housing requirements to those that were agreed prior to Royal Assent. That amendment was tabled by the noble Lord, Lord Best, in Committee, and I am delighted that he has added his name to it today. I should make it clear that this is not an attempt to usurp his role in this; nobody knows the issues better than the noble Lord, but I was not sure whether he would bring it back.

If these provisions concerning renegotiation of Section 106 agreements are not to be removed from the Bill, they must be constrained. We will come on to sunset clauses shortly, but we should note that the Government's proposition is only one small step from where the Bill now stands. In Committee, we acknowledged the significant contribution that Section 106 agreements have made to this country's need for affordable housing. We have noted that local authorities have existing powers to renegotiate Section 106 agreements and that many are using these. We remain sceptical about the need for these new powers. However, notwithstanding these concerns, on the basis of the Government's own logic, there is no need for the rights in the Bill to carry on for ever. If the rationale for Clause 6 is that developers entered into Section 106 affordable housing obligations when economic times were better, is it the Government's position that things will continue to get worse?

If the clause is to be brought to an end in three years, unless the Government are expecting a further downturn in this period, it should not stand in its current form. When we debated this in Committee, the Government argued that there was continuing uncertainty in the market. That may be the case, but presumably the Minister is not arguing for a risk-free platform for developers. Clause 6 was, we understand, supposed to address the substantial change in market circumstances fuelled by the global financial crisis of 2008. Applicants should not agree to Section 106 agreements that they consider will render their development unviable. The use of viability appraisals in negotiations is becoming increasingly common.

We have added our names to Amendment 28 which, as we have heard, would introduce a sunset clause bringing to an end the provisions relating to the modification of affordable housing obligations after three years. Given that very new affordable housing requirements are unlikely to be able to make successful applications, this would generally mean a practical cut-off point of obligations entered into by about 2014. So far as the Government's version of a sunset clause is concerned, this does not move us much further than the Bill, which already gives the power to the Secretary of State by order to repeal Sections 106BA and 106BB of the Town and Country Planning Act 1990. The Government's version of a sunset clause, while repealing those sections at the end of April 2016, also gives the power to the Secretary of State by order to substitute a later date. In effect, there is no clear end date to these provisions. Therefore, we will look to the Government to explain in detail, when they speak to these provisions, why the firm date of April 2016 is not sufficient. If we are not satisfied, we reserve the right to return to this matter at Third Reading. I beg to move.

Photo of Lord Best Lord Best Crossbench

My Lords, I have added my name to Amendment 22, which was prepared by the Local Government Association. I am grateful to the noble Lord, Lord McKenzie, for introducing this amendment and explaining its purpose and value. My overarching concern is that the intention of Clause 6, which is to see stalled development up and running swiftly, will not materialise without substantial changes to this clause. Indeed, the knowledge that central government may overrule legal agreements between local government and house builders may encourage exactly the wrong response from some elements in the house building industry, and this measure could backfire.

The Clause 6 procedure offers relief for house builders where they have paid too much for a site and now wish to be excused from their obligations to provide affordable housing. Amendment 22 would mean that only agreements already made could be addressed by going down this Clause 6 route. The practice of developers speculatively outbidding others-including housing associations keen to buy a site and fulfil the affordable housing obligations on it-would not be perpetuated into the future. It would no longer be possible for developers to say, "Let us gamble on house prices rising, but if they do not do so, we can go to the Planning Inspectorate and secure a release from our Section 106 agreement".

In my most charitable moments, I can feel some sympathy for the small builder who is unable to work on a swings-and-roundabouts basis of some highly profitable and some less profitable site purchases and who unwisely paid too much for a site at the height of the boom some four years ago. The bigger house builders are currently doing very well. Persimmon and Bovis have just reported huge increases in profits of more than 50% and more than 60% respectively. Some smaller developers, however, may have been caught out in 2008 or 2009, thinking house prices would rise inexorably when they have been pretty flat outside London and the hot spots. Nevertheless, surely we do not want to encourage continuing speculation on the basis that, from now on, the state will bail out those who bite off more than they can chew. Any developer entering into a Section 106 negotiation at the current time is clearly doing so with their eyes open to the economic realities of the day. These negotiations make use of viability appraisals and the signal must go out to house builders that they can no longer sign agreements in the expectation that they will not really be necessary to honour those agreements because central government's planning inspectors will set aside their obligations if the developers can show that they will not make a profit of 20% or so.

This amendment draws a line under state intervention in these Section 106 agreements from the date that the Bill becomes an Act. I strongly support it. Alternative amendments for a sunset clause three years hence seem to miss the point. It is now that we want people to get busy and get started on sites that they own and are currently stalled. Every time a local agreement to produce more affordable housing is set aside, households on low incomes waiting for a home are forced to wait longer. We should ensure that this happens on only the rarest occasions. I strongly support an amendment that would stop the perpetuation of the opportunity for developers to renege on agreements that they have signed with local authorities from henceforth.

Photo of Lord Shipley Lord Shipley Liberal Democrat

My Lords, I will speak to Amendment 28. I strongly support Amendment 22 and the principle behind it that only planning obligations agreed prior to Royal Assent should be included in the Bill. Amendment 28 is a sunset clause, and the Government have, through their own Amendment 32, accepted the principles of this. Our view is that no applications should be made under this section three years after its coming into effect. I accept that there may be a case to give power to renew or extend a subsection if economic circumstances demand it. However, I am not convinced that it should be open-ended and effectively give a power to the Secretary of State to extend it for as long as he would wish it to be extended. I am seeking from the Minister some clarification as to what the Government's intention actually is with their Amendment 32.

I will be very precise about the questions to which I think the House should seek to secure answers. It would be helpful if the Minister could refine her amendment at Third Reading, so that any extension to the time limit should be for no more than two years from the date it is proposed. That would have to be before April 2016, so it would give an absolute time limit of five years. Secondly, would the Minister commit to presenting a report to both Houses before bringing forward regulations to extend that time limit? Would the Minister also commit to consulting with social housing providers and others prior to presenting that report, in order to inform its contents? Thirdly, will the Minister also commit to accepting the will of both Houses in any vote to extend the time limit?

The Government should still look to extend Clause 6 to include the full range of planning obligations. Not only would this challenge any perception that the Government viewed affordable housing as of secondary importance in planning terms; but if other obligations are causing the delay, that could remove significant impediments to that development. We will have a chance in a further amendment to look at that a little more closely, but I remain concerned that the Government's amendment is too open-ended.

Photo of Baroness Hanham Baroness Hanham The Parliamentary Under-Secretary of State for Communities and Local Government 6:30 pm, 27th February 2013

My Lords, I should like to explain the purpose and operation of the sun-setting amendment, Amendment 32, in my name in this group. After careful consideration of the concerns expressed by noble Lords in Committee, the amendment we propose sunsets Clause 6 on 30 April 2016 unless an affirmative order is made for it to continue.

Until I heard them speak, I thought that this addressed the amendment proposed by the noble Lords, Lord Shipley, Lord McKenzie and Lord Tope, and the recommendations of the Delegated Powers and Regulatory Reform Committee. As I made clear in Committee, the clause is targeted at helping development to get under way on sites that are being stalled because of the current economic conditions. We believe it is essential to allow for a review of schemes where this could bring development back into viability. This would deliver more private and affordable homes than would otherwise come forward.

The clause already contains a power for the Secretary of State to switch it off by order, reflecting our underlying thinking that this is about addressing current uncertainties. However, we have listened carefully to the arguments that we should define this more precisely. Arguments have been made that the clause should reflect the current uncertainty in the property market and that we should insert a date when the operation of the clause will cease. We have therefore set the sunset date for 30 April 2016. That is based on the forecast from the Office for Budget Responsibility that shows that investment in housing is expected to stabilise in 2016. I accept what the noble Lord, Lord Best, said; there is evidence that some of that housing is beginning to move, which is very welcome. This is reinforced by evidence from the Centre for Economics and Business Research, which expects house prices to return to pre-recession levels in 2016.

The amendment will send a clear message to local authorities and house builders to review their schemes where affordable housing viability is an issue. None of us can be certain about the future of the property market-forecasts are not guarantees-and therefore we have taken a sensible and pragmatic power to extend this date by order should that prove necessary.

The amendments to Clause 28 will require the order to be made through the affirmative procedure and both Houses will have an opportunity to vote. So there is a commitment for it to come back to this House if necessary. Although the amendment does not limit the time period for any future extension, I fully anticipate that this would be for a limited time justified by prevailing market conditions. In taking this approach, we have again followed the suggestion of the Delegated Powers and Regulatory Reform Committee when it commented on the Bill ahead of Committee. The amendment also includes a separate power to make transitional or transitory provisions related to the sunset of the clause by order.

Turning to the amendment tabled by the noble Lords, Lord McKenzie and Lord Best, this would allow only affordable housing obligations in place at the time of Royal Assent to be challenged on the grounds of viability. As I said in Committee, we are still not in a position of stability in the market and, therefore, applying such a limited amendment would not be helpful.

I also provided evidence in Committee from the Office for Budget Responsibility which indicated varied performance across the country. House price growth remains subdued across much of the United Kingdom, and it is widely varied. The recently announced 2.5% house price increase in England was driven by a 5% rise in London and a 3% increase in the south-east. However, in other parts of the country there is a wide variation in house price growth. I said earlier that the forecast of the Office for Budget Responsibility shows house price growth stabilising at 4% by 2016-17.

Concerns have been expressed that a developer could agree a Section 106 next year knowing that he could apply to renegotiate it. If the local planning authority has taken account of local economic realities and negotiates a fair and viable agreement, it is likely that there will be no case for reopening the agreement within the short-to-medium term and a developer would not have viability evidence with which to be successful on appeal. The amendments do not make allowance for current market uncertainties. We believe that we need three years for the housing construction market to stabilise. We wish to allow opportunities for scheme viability to be reviewed, even for those which may come forward after the Bill is given Royal Assent.

Amendments 51 and 52 are minor government amendments which make changes to Schedule 2. They seek to change the numbering of an existing amendment to Schedule 6 of the Town and Country Planning Act 1990. With that explanation for those amendments, and given what I have said about the reasons for the Government's time-limit on the sunset clause, I hope the noble Lord will withdraw his amendment.

Photo of Lord McKenzie of Luton Lord McKenzie of Luton Shadow Spokesperson (Work and Pensions), Shadow Spokesperson (Communities and Local Government)

My Lords, I thank the Minister for her response. I also thank the noble Lord, Lord Best, for his support and for properly and effectively explaining Amendment 22, and the noble Lord, Lord Shipley, for his tacit support.

The Government's response to this is that unless you have certainty in the housing market you must always have the provision currently contained in the Bill. One might accept that argument where there has been particular turmoil in the financial markets-as was occasioned in 2008 when obligations were entered into and the market changed dramatically-but why should there now be this ongoing facility for people who can make a judgment as to what is happening in the market? Yes, there will be some uncertainty-there are always uncertainties in markets-but there is no substantial reason to prolong this opportunity. A cut-off of those things which will have happened by the time this Bill comes into effect is entirely reasonable. In fact, it could be argued that the cut-off should be earlier than that. Indeed, the changes that the Government are making to the regulations generally about affordable obligations go back only to April 2010, so that might be even more restrictive than the amendment allows for.

As to the sunset clause, it cannot be much of a sunset clause if it can be renewed endlessly. There is no certainty as to when its provisions will be brought to an end. I am inclined to support the view of the noble Lord, Lord Shipley, that we will look to the Minister to come back with something more definitive on Third Reading. If the Minister is not able to do so, we will look to amend it because this is, quite rightly, open business. We are dealing with new business tonight which has a continuing uncertainty.

As to Amendment 22, we have not heard a convincing reason why we should not press the amendment, and I seek the view of the House.

Division on Amendment 22

Contents 147; Not-Contents 184.

Amendment 22 disagreed.

Division number 2 Growth and Infrastructure Bill — Report (1st Day)

Aye: 77 Members of the House of Lords

No: 182 Members of the House of Lords

Ayes: A-Z by last name

Tellers

Nos: A-Z by last name

Tellers

Amendment 23

Moved by Lord Shipley

23: Clause 6, page 6, line 15, at end insert-

"(2A) An authority can only make a determination in accordance with subsection (3)(a) if it is satisfied, having regard to the development plan, that modifications to planning obligations other than the affordable housing requirements affecting the development or a reduction in the level of the community infrastructure levy payable would not be more appropriate."

Photo of Lord Shipley Lord Shipley Liberal Democrat 6:50 pm, 27th February 2013

My Lords, I declare my vice-presidency of the Local Government Association.

This amendment is designed to assess why only the affordable housing element of a stalled development should be considered. To make a stalled development economically viable, it is important to look at the full range of planning obligations, not just affordable housing. Sometimes it might be sensible to vary affordable housing obligations, but at other times other matters, such as the scale of highway contributions or a developer's community infrastructure levy liability, might have a greater impact on a development's viability. This approach would reflect the Government's desire to ensure that planning applications are not acting as a barrier to new development and would give much greater flexibility to planning authorities in their negotiations with developers.

I have read carefully the draft viability guidance on Section 106 affordable housing requirements. It says that the application and appeal process will assess the viability of affordable housing requirements only. It will not reopen any other planning policy considerations or review the merits of the permitted scheme. I believe it is very clear that only affordable housing requirements could be subject to negotiation.

However, it also says at a later point in the draft that the timing and level of off-site contributions may also be considered. Will the Minister define an off-site contribution? I take it to be something broader than simply the affordable housing requirement and might actually include the community infrastructure levy. I would like clarification of that because later in the draft viability guidance it says that the relevant sections, Sections 106BA and 106BB, do not provide an opportunity to reopen policy considerations or requirements for planning obligations other than for affordable housing. Again, the matter is clear. Therefore I am left wondering what an off-site contribution actually is, as presumably the affordable housing is on site.

It seems to me to be common sense that local planning authorities should be given the capability to consider other planning obligations as part of a Section 106 agreement beyond simply the affordable housing component. It could be that if there were a successful negotiation on those other matters, it would enable more affordable housing to be built as a consequence. For the reassurance of the Minister, I had not planned to move this to a vote, but I believe that the issue ought to be explored so that we have clarification of what is actually intended and why the Government feel that they cannot permit other planning obligations to be part of the consideration of the renegotiation of a Section 106 agreement. I beg to move.

Photo of Lord Jenkin of Roding Lord Jenkin of Roding Conservative

My noble friend Lord Shipley has raised an interesting issue, which has been raised at earlier stages, as to why only affordable housing is able to be renegotiated. He has also added to his amendment the question of the community infrastructure levy. Bearing in the mind the main purpose of the CIL, I would question whether that would be an appropriate reduction to seek. The CIL is after all intended to provide local authorities with the resources to pay for some of the infrastructure that would be necessary to support the housing requirements. It is true that affordable housing does not attract the CIL, but the rest of the housing development would. If one is going to have a community infrastructure levy, I would be very reluctant to see that negotiated down on the grounds of the developer saying that their scheme is not viable.

We have not had a full explanation of why only affordable housing is able to be renegotiated, because there may well be other obligations. I, too, read the sentence in the guidance about the other "off-site" obligations and I was not quite sure what that meant. When I first read it, I thought that it meant off-site affordable housing, but affordable housing is often not immediately on the same site as the rest of the development; it can be on a different site, so I do not think that that is what it means. I would welcome an explanation from my noble friend on the Front Bench as to what is involved. Hitherto, I have wholly supported the idea of renegotiation. Indeed, it has been the main burden of complaint of developers that they have agreed in different circumstances to affordable housing obligations and that it is that which makes their development unviable. That is why there has been, as was referred to earlier, a lot of negotiation going on with local authorities anyway. However, I am not aware of any local authorities which have negotiated reductions in other planning requirements that may have been necessary.

The draft affordable housing requirements guidance states:

"Timing and level of off-site contributions may also be considered".

What does that refer to? I think that I took the guidance off my computer this morning, so it has come just in time. I would be very much against seeking to renegotiate downwards the community infrastructure levy.

Photo of Lord McKenzie of Luton Lord McKenzie of Luton Shadow Spokesperson (Work and Pensions), Shadow Spokesperson (Communities and Local Government)

My Lords, we received the draft viability guidance late last night, which was not particularly helpful for discussions that we were going to have this evening. I just put it on record that if, when we have had chance to study the guidance, we found particular issues relating to the Bill, we would reserve the right to pick them up at Third Reading. That should not be precluded given the lateness of the availability of that quite important information.

The noble Lord, Lord Shipley, has raised an important question as to why affordable housing should take all the strain to deal with viability. The amendment does not seem necessarily to preclude an appeal to the Secretary of State and what the Secretary of State would do in those circumstances, but that is a drafting point perhaps for another occasion.

Perhaps the Minister might cover in her response the relationship between the Bill and the updated regulations, which I think come into effect tomorrow and deal generally with the right to renegotiate Section 106 obligations, affordable housing and the rest. That would now be done within a three-year period, which I think is the thrust of those regulations. It would be helpful if that could be put in context.

I have been concerned throughout consideration of this Bill that affordable housing is asked to take the strain if a site is not viable. There are broader considerations which should come into play.

Photo of Baroness Hanham Baroness Hanham The Parliamentary Under-Secretary of State for Communities and Local Government 7:00 pm, 27th February 2013

My Lords, I think that it is explanations that are asked for rather than anything else. I was asked what "off-site" provision was. It is exactly what it says. As noble Lords will know, when an obligation is entered into for affordable housing, in many cases that affordable housing is not on the main development site but is being provided elsewhere. All the guidance says is that any affordable housing that is not on the particular site can be taken into account. I hope that explains that. We discussed this quite a bit in Committee but it should be quite clear that this clause relates only to affordable housing. That is the only element that we are seeking to address within this Bill.

Local authorities can voluntarily renegotiate Section 106 agreements already. Under the regulations that have just been laid, they can be required to look at the whole aspect. Often the affordable housing is quite a large aspect of the development obligations and it therefore makes sense not to go through the whole galaxy of the Section 106 review, but to take account of the affordable housing and go through a quicker process.

This is, of course, taken into account against the background of the development plan and has to be reviewed under those provisions together with what was taken into account when planning consent was granted in the first place. The development plans include policies for the delivery of affordable housing to meet local needs. These policies are usually applied in the context of individual site viability. The effect of the clause is to help to deliver these policies by bringing forward viable development; it does not require a revisiting of the plan policies.

The noble Lord, Lord McKenzie, made, I think, a moderate complaint about the fact that the proposals for establishing viability appeared only last night. I recognise that and I apologise that they were rather late. However, they are not very detailed and I think anyone with a lunchtime would have had an opportunity to read them. However, lunchtime does not exist in my life and maybe not in other noble Lords' lives either, so I understand the noble Lord's point.

The obligations that we are discussing were probably agreed at the time of the property boom and before the statutory tests for Section 106 were introduced in April 2010. Before then there was no statutory requirement to ensure that obligations were,

"necessary to make the development acceptable in planning terms".

Therefore, there may be capacity to revisit a range of obligations that were required before the tests were in place.

A full review of all aspects of an agreement could be costly and time-consuming for both parties. We wanted a streamlined review process as a backstop whereby viability is an issue. Affordable housing obligations are often the most expensive element of the Section 106 agreement and are agreed subject to viability. Research from 2007-08 found that about 50% of all planning obligations were for affordable housing so this is quite a significant area. That is why we have focused on only the affordable housing element of a Section 106 agreement in the Bill. For obligations agreed since April 2010, the statutory tests should ensure that the local authority can require only those items that are,

"necessary to make the development acceptable in planning terms".

Our approach will safeguard essential mitigation measures, such as transport, open space and education provision, which are required for the scheme to go ahead, and would be part of the overall Section 106 agreement but would probably take a great deal longer to negotiate. To open up the clause to these other obligations would add complexity to the review and could make the development unacceptable in planning terms.

I turn now to community infrastructure levy payments, which I am not sure the noble Lord, Lord Shipley, mentioned but my noble friend Lord Jenkin did. It is not very helpful to bring them into consideration here. The community infrastructure levy is non-negotiable so it cannot be taken into account as it cannot be renegotiated. The levy is up front-developers know what they will have to pay and it is predictable. It is set at the local level in accordance with local viability. Local authorities do not have discretion to waive or reduce the community infrastructure levy once the payments are set. The regulations make provision for exceptional circumstance relief but only subject to very strict criteria.

With those explanations and going back to the indication that this clause relates only to affordable housing in this Bill, that Section 106 agreements can be renegotiated voluntarily and that the regulations for post-2010 are now in place, I hope noble Lords will realise that there is a package here and will not press their amendments.

Photo of Lord Shipley Lord Shipley Liberal Democrat

My Lords, I thank the Minister for her reply and for her explanation. I am sure that we share the aim of wanting to build more affordable housing. In accepting the Minister's assurances about the Government's desire to get housebuilding on-site, I beg leave to withdraw the amendment.

Amendment 23 withdrawn.

Amendment 24

Moved by Lord Ahmad of Wimbledon

24: Clause 6, page 7, line 10, after "to" insert "-

(a) "

Photo of Lord Ahmad of Wimbledon Lord Ahmad of Wimbledon Lord in Waiting (HM Household) (Whip)

My Lords, these amendments set out procedural steps to reflect the existing mayoral planning powers on applications of strategic importance in London. They are therefore in line with the amendment tabled by my noble friend Lord Tope and supported by my noble friend Lord Jenkin and the noble Baroness, Lady Valentine, in Committee.

We are proposing that the mayor should be notified of applications under Section 106BA relating to planning consents on which he was formally consulted, and that he should have the right to submit evidence on the viability of to those applications if he wishes. To ensure that decisions are made in a timely manner, we have set tight timescales for the Mayor of London to notify and submit representations to the authority. The mayor will have seven days from the day the application was received by the authority to notify it of whether he wants to make representations. The mayor will then have 14 days from the day the application was received by the authority to submit representations, or such other time as agreed between the authority and the applicant. The local planning authority will have an additional seven days to determine any application to which this amendment applies. That is to reflect the additional time needed to work with the Greater London Authority. I hope noble Lords will welcome the amendments we are proposing and I beg to move.

Photo of Lord Tope Lord Tope Liberal Democrat

I very much welcome these amendments. I thank the Minister for listening, hearing and acting.

Amendment 24 agreed.

Amendment 25

Moved by Lord McKenzie of Luton

25: Clause 6, page 7, line 10, leave out "guidance issued by the Secretary of State." and insert "regulations, subject to consultation, setting out the criteria upon which viability, for the purposes of this section, is to be assessed.

(8A) Regulations under subsection (8) shall be in the form of a statutory instrument and shall not be made unless a draft of them has been laid before and approved by both Houses of Parliament."

Photo of Lord McKenzie of Luton Lord McKenzie of Luton Shadow Spokesperson (Work and Pensions), Shadow Spokesperson (Communities and Local Government)

My Lords, I turn again to the tardiness of the criteria. The noble Baroness may have been able to look at them over lunch; I was dealing with the consultation responses, which arrived on my desk this morning. Having said that, we need to study the guidance and reserve our right to deal with any residual issues on Report. I was not going to move this amendment, but I did not want to leave hanging the two important amendments tabled by the noble Lord, Lord Best. The purpose of Amendment 25 is to say that it should not just be left to guidance; there should be a process and a statutory instrument that deals with viability issues, given its importance. I will be happy to reserve judgment on that once I have had the opportunity to study in detail what was issued to us late last night. On that basis, I beg to move.

Photo of Lord Best Lord Best Crossbench

Have we reached my amendments? No? I did not think that I had missed my cue.

Photo of Baroness Hanham Baroness Hanham The Parliamentary Under-Secretary of State for Communities and Local Government

My Lords, I apologise. I always manage to do this once, sometimes more than once. Perhaps we can rest a moment before we hear from the noble Lord, Lord Best.

Amendment 25, in the name of the noble Lord, Lord McKenzie, which I have noted but which I shall say more about, requires local authorities to have regard to regulations setting out how viability will be assessed. Those regulations are to be subject to consultation and the affirmative procedure. I hear what the noble Lord says about returning to this at Third Reading, but in the mean time it might be helpful if I just go through where we are.

The draft viability guidance has been circulated to assist the House's understanding of how developers, local authorities and the Planning Inspectorate will approach the new process. It is an early draft, and we intend to discuss it further with professional bodies and interested groups before a final version is issued on Royal Assent.

Noble Lords will see that the basic principle of the guidance is that it works with existing industry practice on assessment of viability. It strongly encourages developers to use the same methodology and basic assumptions as in their original assessment and to focus on what has changed. A number of technical questions have been raised on the draft viability guidance. If it would be helpful to noble Lords, I am happy to have a meeting between now and Third Reading to hear views and see whether we can resolve, or at least discuss, some of the issues.

There is a good deal of technical information in the draft guidance, which needs to be kept under review. Using secondary legislation would not allow the flexibility to adapt to changing circumstances and data that statutory guidance offers.

Noble Lords will recall that the legislation for the community infrastructure levy, introduced under the previous Government, makes provision for statutory guidance. That covers the assessment of viability for the purposes of setting the levy. It is a model that allows for the required flexibility and is one that we intend to follow.

I hope that, with that reassurance, the noble Lord will withdraw his amendment, even if only for the moment.

Photo of Lord McKenzie of Luton Lord McKenzie of Luton Shadow Spokesperson (Work and Pensions), Shadow Spokesperson (Communities and Local Government)

I am grateful to the Minister for that reply. I certainly propose to withdraw the amendment. I am grateful for the offer of a meeting between now and Third Reading to have at least some chance to discuss the draft guidance. I hang on to the point that, as the noble Baroness said, this is an early draft that gives us no further formal opportunity for input. The criteria will be central to the operation of the provisions. Perhaps that is a matter for Third Reading, but I would be very interested in taking up the offer of a session before then on what detail is available. I beg leave to withdraw the amendment.

Amendment 25 withdrawn.

Amendments 26 and 27

Moved by Baroness Hanham

26: Clause 6, page 7, line 10, at end insert ", and

(b) where the determination relates to an application to which section 106BAA applies, any representations made by the Mayor of London in accordance with that section."

27: Clause 6, page 7, line 14, after "(a)" insert "(and subject to section 106BAA(5))"

Amendments 26 and 27 agreed.

Amendment 28 not moved.

Amendment 29

Moved by Baroness Hanham

29: Clause 6, page 8, line 5, at end insert-

"106BAA Duty to notify the Mayor of London of certain applications under section 106BA

(1) This section applies to an application under section 106BA(2) in relation to a planning obligation where-

(a) the application for the planning permission to which the planning obligation relates was an application to which section 2A applied (applications of potential strategic importance relating to land in Greater London),

(b) the application for planning permission was not determined by the Mayor of London, and

(c) pursuant to an order under section 2A or a development order, the local planning authority that determined the application for planning permission was required to consult the Mayor of London in relation to that determination.

(2) A local planning authority that receives an application to which this section applies must send a copy of the application to the Mayor of London before the end of the next working day following the day on which the application was received.

In this subsection, "working day" means a day which is not a Saturday, Sunday, Bank Holiday or other public holiday.

(3) The Mayor of London must notify the local planning authority before the end of the period of 7 days beginning with the day on which the application was received by the authority whether the Mayor intends to make representations about the application.

(4) Where pursuant to subsection (3) the Mayor of London notifies the local planning authority that the Mayor intends to make representations, those representations must be made before-

(a) the end of the period of 14 days beginning with the day on which the application was received by the authority, or

(b) the end of such longer period as may be agreed in writing between the local planning authority and the Mayor.

(5) Where this section applies, section 106BA(9)(b) applies as if it required an authority to give notice of their determination to an applicant within-

(a) the period of 35 days beginning with the day on which the application was received by the authority, or

(b) such longer period as is agreed in writing between the applicant and the authority."

Amendment 29 agreed.

Amendment 30

Moved by Lord Best

30: Clause 6, page 9, line 13, at end insert-

"( ) the modifications necessary to ensure that if the market value of the development has increased over that predicted before the first application under section 106BA in relation to the obligation, the developer will pay a contribution proportionate to the increase in value to the local planning authority, solely for the purpose of providing local affordable housing linked to the development plan for the area."

Photo of Lord Best Lord Best Crossbench 7:15 pm, 27th February 2013

My Lords, I shall speak to Amendments 30, 31 and 35. I preface my remarks by thanking the Minister for a really helpful and lengthy meeting at which a number of my earlier amendments were discussed. On the basis of that discussion, I have dropped three of my amendments along the way, either because I have better understood where the Government were coming from or because I noticed some modest amendments along the way. I was extremely grateful for that more than helpful discussion.

Amendments 30, 31 and 35 all address the hazards in Clause 6 and are intended to ensure that the clause achieves what the Government intend: to get developers on site and building new homes as a quid pro quo for being able to increase their profits on sites where they have previously signed up to obligations to allocate some homes for affordable housing.

Amendment 30 would protect the local authority, the taxpayer and the people who need affordable housing from developers being excused from their obligations on the grounds of expected low house prices today but making substantial profits in future when house prices have risen appreciably. The amendment inserts a clawback provision for the local authority to receive payment in kind if values rise more than expected. A highly unsatisfactory outcome from the use of Clause 6 by a developer to secure a reduction in the affordable housing on its site would be for it simply to await house price increases and make a killing later. Then, the developer would see bigger gains in the years ahead, but the whole purpose of the Bill-to get sites developed today-would be thwarted.

When I brought a similar amendment from the LGA before your Lordships in Committee, the proposition was that local authorities should share a proportion of the profit from future sales if they turned out to be at higher levels than had been expected when the deal was considered by the Planning Inspectorate. The revised amendment is intended to address concerns raised by your Lordships that that route would not be appropriate. The new version would ensure that the local authority could claw back only a commuted sum-payment in kind-in the form of finance specifically to replace some or all of the affordable housing in the original planning obligation, probably to build offsite. That seems entirely reasonable and I hope that the revised amendment will be acceptable to Ministers.

Amendment 31 takes the story forward. It is intended to address the situation where, after a Clause 6 negotiation has reduced the previous requirement for affordable housing, the developer does not, as the Government hope, start swiftly on site but instead awaits the moment when the market is more favourable and prices are higher. The primary reason why sites are stalled is the reluctance of housebuilders to press forward with developments of homes for sale because the local market is sluggish and, if they build too quickly, it will be impossible to achieve the prices they desire.

Even if they are allowed to produce fewer affordable homes-homes which are usually transferred to a housing association for rent or shared ownership-the market for outright sales will remain the same, and the housebuilder may well prefer to await an upturn rather than, despite the earnest hopes of the Government, getting going with the building work which is so badly needed. Amendment 31 would compel the developer to commence construction within six months if it receives a favourable outcome from invoking the provisions of Clause 6 and secures a reduction in its legal obligation.

That is a fundamental point. Unless there is a benefit to society in the form of a rapid start on site, most people would surely ask why the state should be intervening retrospectively to overrule a legal agreement between a local council and a housebuilder simply to increase the profits of the latter. Why should central Government step in when a speculative land purchase now means that a development is not as profitable as the housebuilder had hoped? After all, no one has suggested that local authorities should pursue housebuilders for an increase in the quota of affordable housing when, a year or two after an agreement was signed, house prices rise dramatically, as they did a few years ago, when unexpectedly high profits were made.

If the developer is able to negotiate a reduction in their Section 106 obligations, they will raise the value of the site without laying a single brick. Amendment 31 is intended to overcome this major defect in Clause 6 and require housebuilders to commence construction within six months if they receive a favourable outcome from their appeal. If the Planning Inspectorate has found the development would not have been profitable because of the level of affordable housing required and has reduced that level accordingly, there should be no good reason why the developer should continue to sit on their planning approval. Instead of being accused of land banking, they should then start delivering the homes the UK so badly needs.

Finally, Amendment 35 puts the finishing touches to these proposed changes to Clause 6 by raising the threshold of what defines commencement of development on site. Planning permissions do not last indefinitely, and in considering whether to extend a permission or allow it to expire, a local authority considers whether the developer has commenced development, defined as a "material operation" in Section 56 of the Town and Country Planning Act 1990. The Act sets out what a developer has to do on site to implement a planning permission. The physical works that make up a "material operation" can be relatively minimal when compared with the totality of the development-for example, digging a trench or starting to lay a road. Case law is clear that it does not matter if the developer carries out those works simply to keep the planning permission alive, rather than with a genuine intention to complete the development. If developers have to start within six months, but simply dig a ditch, Amendment 31 has not taken us forward.

I moved an amendment in Committee to enable local authorities and developers to agree at the outset what the definition of commencement would be. The Minister's response, which I fully understand, was that this would create a postcode lottery, with every council doing things differently. The problem might be countered with non-statutory guidance on best practice. However, in recognition of ministerial concerns, I am now suggesting an amendment that raises the threshold of what is defined as commencement. This amendment would alter the current definition of what constitutes a "material operation". It would require a certain percentage of, for example, the foundations to be completed to count as a material operation and thus keep the planning permission alive. Spelling this out would have the benefit of certainty. It would encourage developers to move from commencement to completion faster in the future because a greater proportion of costs would have been incurred at an earlier stage.

In combination, these three amendments salvage something sensible from Clause 6 and save the Government from falling into a trap. The worst possible outcome would see the clause to reduce the amount of affordable homes that developers are required to build proceeding, but developers still not getting on with the job and instead banking the increased value gained from having their obligations reduced and waiting until house prices, pressurised by escalating shortages, rise and bigger profits can be made. I beg to move.

Photo of Lord Deben Lord Deben Conservative

Before the noble Lord sits down, may I ask a question because there is something I do not understand? What is there under present law to stop a local authority saying to a developer, "Yes, we'll agree to this, but there are other conditions that are part of that deal"? All that the noble Lord suggests could be perfectly properly achieved in a deal with the local authority. What sort of local authority would give its permission without such a deal taking place?

Photo of Lord Best Lord Best Crossbench

These cases are historic, dating back to 2008-09, where a Section 106 agreement has been signed that does not specify that commencement on site must happen within six months or what commencement on site means, other than within the law. The agreement has not been, if you like, sharply enough defined, although it has followed standard practice. The opportunity then exists for the developer to say, "I don't wish to proceed on this basis. I shall use Clause 6 and the Planning Inspectorate to reduce my obligations. Even though I signed up to that, I don't want to be held to it any longer because I have decided that the profitability of my scheme would be increased if I waited some time and did the development later". These amendments put pressure on the housebuilder and enable the job to be started.

Photo of Lord Shipley Lord Shipley Liberal Democrat

My Lords, I support the amendment so ably moved by the noble Lord, Lord Best, and would like to speak in particular to Amendment 31, to which my name has been added.

I regard this as a public interest matter and I am not currently assured that this is being addressed adequately in the Bill. It seems to me that taxpayers have a right to secure clawback if, following a renegotiation, there is a rise in the value of the land. That clawback should be spent on affordable housing because it was the inability to build and the requirements around the level of affordable housing that caused the renegotiations to take place initially. There is a public interest issue here on behalf of the taxpayer, who should be able to share in the rise of the value of land.

On Amendment 31, it is reasonable that an applicant, having renegotiated successfully, must commence development within six months of the final appeal decision. Otherwise, if they do not get on with it, what is the point of that appeal having been made? It seems to me that the public interest requires a developer to get on with the building, having successfully renegotiated the arrangement.

I read very carefully the draft liability test and I am very concerned about the failure of the Government to define "commencement" as at present it can only be defined in terms of the case law that exists. I find Amendment 35 to be extremely helpful because it seeks to define what commencement means. Also, in terms of securing an outcome-renegotiation-which is in the public interest and in the interest of taxpayers, it seems reasonable to have a tighter definition of what commencement means.

Photo of Lord Deben Lord Deben Conservative

I wonder whether my noble friend could help me. It may be that I am extremely stupid about this, but I do not understand why it is not possible for the local authority, as part of its renegotiation, to insist upon these things in any case. Why can it not say, "As part of the agreement we want to do this, but the deal is you do actually get started in the way that we between us decide is a start." Is there anything illegal in doing that?

Photo of Lord Shipley Lord Shipley Liberal Democrat

My Lords, I am grateful for my noble friend's intervention. The Minister will be in a better position to reply, but it seems to me that, where there is agreement, these matters can be satisfactorily resolved. The problem arises when there is not agreement, as a consequence of which a decision has to be made. The case law definition of commencement will then be used; it will enable a whole set of minor things to be done and the developer is deemed in law to have commenced development. Amendment 35 defines much more closely what commencement actually means.

Photo of Lord Mackay of Clashfern Lord Mackay of Clashfern Conservative 7:30 pm, 27th February 2013

My Lords, there is a certain amount of misunderstanding arising in this situation. As I understand it, if the new clause is left as it is, on the planning inspector agreeing a reduction the developer would have no obligation except the statutory obligation. He could not, or the local authority would not be in a position to, redefine the commencement of development because the statutory authority would open the way such that the local authority could not close it. The view of the noble Lord, Lord Deben, is that it might be a good idea to permit the local authority to make such an arrangement. However, that is not provided for as yet and the amendment tabled by the noble Lord, Lord Best, seems to deal with this. The local authority might make an even better definition, depending on local circumstances, but having some power in the local authority to persuade or force the developer to get on with it in a reasonable time, if he takes the reduction, seems essential for this to work.

Photo of Lord Deben Lord Deben Conservative

My Lords, there is an issue here. I do not actually like the way proposed by the noble Lord, Lord Best, because it seems too prescriptive as to how it might be done. I am entirely in favour of this clause. It is very important, in the present circumstances, to find a way of not insisting upon the kinds of costs which were possible at a time in which prices were utterly different. I therefore like the clause but I am concerned that it does not include the possibility of local authorities saying "Yes, okay, the inspector has said that we can reduce the number by this level but the deal is that you get started-and these are the terms of getting started that we want". In other words, I am not sure that I want to have statutory, public, universal terms because it would seem much better to have it dealt with at local level, and to lay down there which definition of commencement was necessary in this circumstance by this particular local authority.

I am not sure that I like the answer which the noble Lord, Lord Best, has brought forward but my noble and learned friend has pointed to the fact that we need some sort of answer. If we do not have one, people will be getting a deal and then not doing what we are trying to bring this forward to achieve. I do not know whether my noble friend would be right to accept this amendment, but it would be helpful to us if she were prepared, at least, to look again at having some kind of mechanism so that this was not misused, instead of being the very valuable thing which it could so easily be.

Photo of Earl Attlee Earl Attlee Lords Spokesperson (Department for Transport), Lord in Waiting (HM Household) (Whip)

My Lords, we need to be a little careful about Report stage rules.

Photo of Lord McKenzie of Luton Lord McKenzie of Luton Shadow Spokesperson (Work and Pensions), Shadow Spokesperson (Communities and Local Government)

My Lords, we support Amendment 31; indeed, I have added my name to it. Compelling early undertaking is absolutely right when people have had the benefit of a change of Section 106 obligations. Having heard the noble Lord's reformulation of Amendment 30, we support that as well, since it deals with the point that the Minister raised in Committee.

I understand entirely the thrust of Amendment 35 and what the noble Lord is seeking to achieve by it. I have a slight hesitation about the detail. I am sure it would be a lawyers' paradise to try to determine whether 50% of the foundations have been laid or whether 50% of a road has been laid, for obvious reasons. Would it be cost, width, depth or whatever? However, that should not preclude an attempt to get something more effective than what is there at the moment, so perhaps that is a task to be done between now and Third Reading.

Photo of Baroness Hanham Baroness Hanham The Parliamentary Under-Secretary of State for Communities and Local Government

My Lords, I thank noble Lords for that debate. The noble Lord, Lord Best, explained clearly that his amendments are aimed at ensuring that development happens. We all want to ensure that happens, as there is otherwise no purpose in this clause. I understand the desire that, in return for an adjusted affordable housing obligation won at appeal, a developer should get on and build. Planning consent is permission to build; it is not a requirement to build. The purpose of this clause is to give developers an opportunity to build, allowing them to review schemes against prevailing market conditions and secure a viable affordable housing agreement. We should remember that without this clause many housing sites will not come forward at all, which is not what we want. Of course, having put in place a revised agreement, we want developers to build, and that is the purpose of the amendment tabled by the noble Lord, Lord Best.

Clause 6 places a three-year time limit on modified obligations made on appeal. If the development is not completed within three years, which is the other side of the coin that the noble Lord referred to-he was talking about commencement while I am talking about completion-the original affordable housing requirement will apply to those parts of the scheme which have not been commenced, so there is a difficulty for the developer in that. Developers are incentivised to build out as much of their scheme as possible within those three years. It will not be sufficient to commence one part of the development to secure the revised affordable housing obligation for the whole scheme.

For example, on a scheme of 100 homes, if 50 units are completed at the end of the three years and the remaining 50 are not commenced, the appeal decisions would require that the original obligation would apply to the remaining 50-so we would go back to 100. If developers are concerned about the viability of their scheme at the end of the three years, they can seek to modify the agreement again. This could be done through voluntary renegotiation or by making a new application under this process.

We believe that the clause ensures that we incentivise build-out and completion. Local authorities are not bound by a three-year decision, but we are clear in our draft guidance that they can follow similar time limits prescribed for appeal decisions. We believe that this decision is best made locally. Where the matter has gone to the planning inspectors, the local authority can of course put its own evidence to the Planning Inspectorate, which could include evidence on commencement of the development. That could become part of the modified planning obligation if the planning inspectors agree to it.

I hope that the noble Lord will take some comfort from our being aware that local authorities have a wide range of tools and powers to encourage development. Those may be through the way they use the Section 106 agreements flexibly or in the way that they support development through investment in infrastructure or the use of land assets. We are aware of local authorities which have introduced clawback agreements to incentivise developments and we understand that those may be appropriate in some circumstances.

More specifically on Amendment 31, which prescribes a six-month commencement for appeal decisions, I said in Committee that I thought setting a six-month period in primary legislation was too prescriptive. I am particularly concerned that placing a six-month limit to commence development will allow little time for developers to get on site-this is the other side of the coin that we have just been talking about. Not all schemes will be ready to go when they are renegotiated. Regeneration schemes where land is in multiple ownership or where planning conditions need to be met before development can commence could be excluded from this process by the six-month limit. Sites where significant work, such as decontamination, needs to be done to prepare the site for development could be excluded. We want to ensure that we deliver as many homes as possible through this measure, not through an overly prescriptive approach, which could be counterproductive and end up with these measures having no effect.

In Amendment 30, the noble Lord, Lord Best, proposes to require the Planning Inspectorate to introduce a clawback in appeal cases whereby the local authority receives increased funds for affordable housing if the market rises. I oppose this amendment because it requires the Planning Inspectorate to make provision for a clawback agreement, which would impose a requirement that will not be appropriate in all cases. I am also concerned that this amendment might have unintended consequences. In cases, where a variable agreement would be onerous and unnecessary, the inclusion of the amendment could discourage developers from appealing. We need developers to engage in this process and ensure they can secure viable agreements and we can then secure the affordable housing.

I will now turn to the new clause on redefining commencement. The definition of commencement and material operation serves a wide range of purposes in planning law. It triggers the payment of community infrastructure levy and Section 106 revenues. Perhaps most importantly, it is used by local authorities to establish whether a development needs planning permission and can form the basis of enforcement action if a material operation has taken place without permission. In short, the amendment would have far-reaching and fundamental consequences that go far beyond its intention, which is to prevent developers from doing a minimal amount of work lawfully to implement a planning permission. The noble Lord spelled that out quite clearly.

Changing the commencement threshold in the way envisaged would not have a substantial effect on the behaviour of developers. Any new definition of commencement would simply create a new minimum threshold for such developers to build to. The additional costs for a developer in doing so would be unlikely to be significant in the context of an overall construction budget. Furthermore, the complexity of the threshold proposed would result in uncertainty and confusion that would affect all parties involved in the planning process, including local authorities. As the definition of development is a highly contested part of planning law, it would be likely to result in a significant rise in legal challenges as the courts interpreted the new definition. Any legal definition of commencement should be exactly that: the point at which a development is commenced. It would be counterfactual at best to say in legislation that a building project where the foundations or roads are 49% complete or where only 99% of the pipes have been connected has somehow not legally begun.

In short, while I recognise the problem, this is not the right solution. It would do very little to address the problem, while it would have wide-ranging consequences for other areas of planning practice and have a very significant adverse impact on local authorities, developers and third parties. There is already a power available for a local planning authority to serve a completion notice to deal with uncompleted development. However, a far more productive approach would be to address the underlying reasons for developers delaying their schemes. The Government recognise the importance of this through a number of initiatives, such as the £570 million Get Britain Building fund to unlock stalled sites.

I hope that with these comments the noble Lord will feel able to withdraw his amendment.

Photo of Lord Best Lord Best Crossbench

My Lords, I am very grateful for the debate that this has stimulated and for the interventions from the noble Lord, Lord Deben, and the noble and learned Lord, Lord Mackay. We have explored an issue and taken it a little bit further than anyone has before in these public fora. These ways of trying to persuade the developer to start building-which is what we are all about-are quite difficult, and it is quite messy to concentrate on defining where commencement really lies. Concentrating on completions of developments which are, obviously, at a later date than my six months for a start, sounds a much improved way of looking at this. I had not appreciated-and I am not sure if others had-that it will be possible for the Planning Inspectorate to place conditions relating to a timescale and a definition of starting on more than simply the reduction in the amount of affordable housing. The assumption has been that it is the reduction in affordable housing that the planning inspector can talk about, and these other, more sophisticated, aspects of getting things going have been beyond the remit of the Planning Inspectorate when these appeals come forward. We are hearing tonight that the planning inspector could, in a way, substitute for the negotiation that has failed at the local authority and developer end. These cases have gone forward only because earlier negotiations have failed. It could be that the planning inspector could substitute for that and come up with a set of requirements that go with the consent to drop the amount of affordable housing.

I am grateful to the Minister for explaining these issues in more depth. I will go away and think about them and hope that, within that explanation, there are the seeds of hope.

Photo of Lord Mackay of Clashfern Lord Mackay of Clashfern Conservative 7:45 pm, 27th February 2013

My Lords, before the noble Lord decides what he is going to do about this, I would like to air the question of whether the planning inspector has these powers. The noble Baroness assumes that he has these powers, but I am not immediately sure that he would have them because the statute prescribes what he can do. She may be right-I am not saying she is not-but it is a critical part of her answer. In so far as it is correct, the answer is, no doubt, a good one, but if it is not correct, the answer is, to that extent, defective.

Photo of Baroness Hanham Baroness Hanham The Parliamentary Under-Secretary of State for Communities and Local Government

My Lords, I need to answer this. The inspector will have the power to say that these developments have got to be completed within three years.

Photo of Lord Best Lord Best Crossbench

My Lords, I beg leave to withdraw the amendment.

Amendment 30 withdrawn.

Amendment 31 not moved.

Amendment 32

Moved by Baroness Hanham

32: Clause 6, page 10, line 1, leave out subsections (4) and (5) and insert-

"(4) Sections 106BA, 106BAA and 106BB of the Town and Country Planning Act 1990, and subsection (5) of this section, are repealed at the end of 30 April 2016.

(5) The Secretary of State may by order amend subsection (4) by substituting a later date for the date for the time being specified in that subsection.

(6) The Secretary of State may by order make transitional or transitory provision or savings relating to any of the repeals made by subsection (4)."

Amendment 32 agreed.

Schedule 2 : Modification or discharge of affordable housing requirements: related amendments

Amendments 33 and 34

Moved by Baroness Hanham

33: Schedule 2, page 43, line 11, leave out "that sub-paragraph" and insert "sub-paragraph (2)"

34: Schedule 2, page 43, line 12, leave out "(1A)" and insert "(2A)"

Amendments 33 and 34 agreed.

Amendment 35 not moved.

Consideration on Report adjourned.