Moved by Baroness Taylor of Stevenage
403: Clause 156, page 193, line 11, at end insert—“(c) the Secretary of State has published a strategy for ensuring the development corporation is accountable to local residents”Member's explanatory statementThis is to probe the accountability of development corporations.
My Lords, although it is not a matter for the register of interests, I declare a particular interest in this group of amendments in that I grew up in an area developed and managed for many years by a development corporation. At their best, they provide focus, finance and pace for new development. If we are serious about tackling the severe housing crisis, which we have discussed so many times in your Lordships’ House, and ensuring that we create the conditions and environment for the new forms of employment we need—I am reminded of recent discussions in Question Time about the need to develop new battery capacity at speed—we should welcome the move to enable this way of tackling new developments at scale.
However, we must ensure that, as we do so, we learn the lessons of the past, including the not-so-distant past: with all the safeguards we need to ensure development at pace does not ride roughshod over proper and appropriate process and accountability. We also need to ensure that there is appropriate membership of, and links with, those who are democratically elected at local level, so that the public can be reassured they have a recourse via the democratic route.
May I ask the noble Earl the Minister a few questions before I begin consideration of our amendments about the way that development corporations are framed in the Bill? First, the Bill refers to one or more local authorities having what is called “oversight” of the development corporation. Of course, as advocates of localism we welcome this, but can the Minister be more specific about whether that means that the local authority will be the accountable body, which is a different term? This important distinction would help us to understand whether it is the Government’s intention that development corporations are autonomous in terms of finance or whether financial decision-making and probity will still require a council process. If it is the former, I am not convinced that there is sufficient detail in the Bill about how probity will be achieved. Bearing in mind the very considerable sums of public money that will potentially flow through development corporations, it is absolutely crucial that we are all clear on this issue.
Also in relation to finance, the Bill creates substantial new powers of borrowing for development corporations. Will they be subject to the same prudential borrowing regime as local authorities? If it were not so late, I could talk more about public accounts committees and local public accounts committees and how that might be a solution, but I will save that for another day.
Secondly, regarding how development corporations are to operate in terms of planning powers, will they be responsible only for the planning of new development within the designated area? To explain further: should the designated area contain existing development, does the council remain responsible for day-to-day matters of planning, such as infill development, extensions, tree preservation orders and so on, or is the whole gamut of planning within the application area the responsibility of the development corporation once the designation has been made? Can the Minister also clarify whether, in two-tier areas, the district council takes on the planning powers of both tiers—for example, the minerals, waste and flooding powers of the county as well as district planning powers? Would the county council keep the minerals and flooding powers without housing powers, or would all those powers transfer to the development corporation?
Lastly, in terms of membership and chairmanship of a development corporation, it is not clear to me whether this is left entirely to local discretion or whether it will require government departmental sign-off. Will it be a requirement that each local authority that comes within the designated area of the development corporation will be entitled to representation on that development corporation? Can the Minister give any further clarity on that? I am happy to have a response in writing at a later date.
Amendment 403 attempts to establish a principle that the development corporation should be accountable to local residents. When councils undertake development, whatever the scale, the public have all the protections that have been built into the planning system through the route of democratic accountability. Our amendment probes how that will be replicated in relation to development corporations. I note that the new Amendment 403A, in the names of the noble Baroness, Lady Pinnock, and the noble Lord, Lord Shipley, makes a similar point in relation to ensuring that the public get value for money.
In view of discussions in your Lordships’ House just yesterday relating to the very significant development taking place under the mayoral development corporation in Teesside, I think it is particularly important that the accountability route for the public in relation to both the development itself and the public funds invested is much clearer than it is at present. We strongly believe that development undertaken by a development corporation should have to be in accordance with local plans, subject to master planning, where it is implementing development at scale, and subject to the same reassurance of independent examination as is required of councils.
Our Amendment 404 would give the public the opportunity to make representation at an independent inquiry.
Our continuing concern about this Government’s failure to deliver any scale of housebuilding that would help to tackle our housing emergency has prompted our Amendment 406, which probes the Government’s intentions in relation to a programme for new towns. We have had many discussions in Committee about the role of members of local councils in the development of their areas. Too often in the past, these vital community bodies—parish, town and other community councils—are left out of the loop. Their role at the heart of their communities is key to ensuring that there is a voice for local people as developments move forward.
Our Amendments 407 and 408 will introduce a requirement for local councils to be represented on locally led urban development corporations. In my questions to the Minister, I outlined our concerns over how the finances of a development corporation are to be publicly accountable. Our Amendment 409 reflects that concern and asks that the Secretary of State is much clearer than the Bill currently is about how the finances of development corporations are to be transparent, how they will be monitored and how they are to be accountable to the public. I beg to move.
My Lords, this short group is actually very important. Clause 156 in Part 8 is an introduction by the Government of a new type of development corporation: locally led. Development corporations have been around in various guises for a long time—new towns, Canary Wharf and the Olympic Park are examples—with very variable degrees of success in achieving their stated aims. Development corporations are the vehicle for public-private partnerships, often to develop former industrial sites. In that sense, the principle is supported by these Benches. However, the noble Baroness, Lady Taylor of Stevenage, is quite right to challenge some aspects of the planned changes. We support her Amendments 404 and 405, which would ensure that the public have a right for their voice to be heard. This is, after all, the levelling-up Bill, where public engagement, involvement and participation are emphasised.
It is absolutely right—fundamental, in my view—that locally elected representatives are at the heart of development corporations, for the very reason that they are the route by which members of the public can take their concerns, raise complaints, get answers, challenge decisions that are being made and hold the board to account for the public money that is being spent. Unfortunately, that is not the case with some existing development corporations. Wherever public funding is involved, as it is in development corporations, there has to be public and transparent decision-making and then public accountability for those decisions. Hence Amendment 403A in my name and that of my noble friend Lord Shipley.
Unfortunately, one development corporation, the Teesside Development Corporation mentioned by the noble Baroness, Lady Taylor of Stevenage, is making headlines of the wrong sort, in both the Yorkshire Post and the Financial Times, for the apparent failure of transparency and accountability. Teesside is a mayoral development corporation—I asked this question yesterday in the Chamber, to which the noble Baroness, Lady Scott, responded—where it seems that the mayor has the sole right to appoint the board membership of the development corporation. I think that was the response I got, but maybe that is not the case, in which case I hope that is put right. This practice is totally contrary to good governance, where openness and inclusivity have to be the hallmark. The extension of development corporations to include locally led ones is an opportunity for the Government to review best practice in governance, transparency and accountability and make the appropriate changes so that all development corporations meet the highest standards of open and transparent governance.
It is clearly counter to good governance for one person—the Mayor of Tees Valley, in this case—to have the power to appoint board members. This has to change; otherwise, there will always be a smell of cronyism, whether perceived or real, surrounding the board, and, where that is the case, it does not do any good for anybody. Good governance also involves meetings being held in public, where questions can be asked and the board be held accountable for its decisions. Unfortunately, as we have learned from reports in the Financial Times concerning the Teesside Development Corporation, that is not the case. Former members of the board resigned because they said that discussions and decisions on key issues did not take place at board meetings, because the mayor made decisions in private and undocumented meetings with private developers. That just makes people think that the wrong decisions are being made for the wrong reasons. Good governance is about openness, transparency and accountability, and where that does not occur, you get instances such as this, where investigative journalists raise issues because it does not look as though decisions have been made in the public’s best interests. That is the bit I wanted to say about governance, because I feel very strongly about it.
The second part I want to raise is about the rights and powers on planning that have been given to development corporations. As anyone who has been involved in local government knows, an area that is set aside for a particular purpose is not an island on its own; it has connections with the rest of the area to which it belongs. However large the area, there will be consequences for the communities that surround it. Traffic is an obvious one; environmental standards, air quality and noise pollution may be other examples. Where the development corporations are given powers over the planning process, my concerns are around the local planning authority’s wider local plan, which will have a whole raft of policies, including the NPPF policies, incorporated into it, to which it will expect all planning applications in their area to adhere. Where we have a development corporation which has been given planning powers apparently to speed up decision-making, it must be done in line with the policies that have been agreed by the local planning authority and the local council in the local plan; otherwise, the consequences of what is done in the development corporation area will have an impact on the rest of the area and will not have been taken into account.
Development corporations, and locally led ones, are a very useful tool for regeneration, particularly of brownfield sites in former industrial areas. However, it must be done in a way that responds to local needs, where local representatives can be heard and be part of the decision-making process, and the planning and environmental concerns are those of the local planning authority and the local council.
My Lords, I support what the noble Baroness, Lady Taylor of Stevenage, said, as well as what my noble friend Lady Pinnock had to say about this.
I need to start by saying that I worked in the architects’ department of a new town for 13 years and lived in that new town during its raw development stage. Noble Lords will not be surprised to hear me say that I believe that the development corporation model has a proven track record, usually of building communities with all the essential infrastructure in a joined-up way. The Government are right to see the development corporation model as one means of accelerating necessary development, and I welcome the presence of these clauses in the Bill.
However, I will just briefly reflect on my experience. During the 1960s and 1970s, the new towns were very top-down in conception. The New Town Act made the development corporation I worked with simultaneously the client, the designer, the planning authority and the funding channel for the delivery of the projects I worked on, which was a very cosy situation for those of us working on the projects but not so good if you lived next door or sometimes literally underneath where we were developing. The later generation of urban development corporations mostly paid better lip service to local democratic institutions than that.
However, there are deficiencies, and my noble friend Lady Pinnock has put her finger on one of them. It is good that the relevant clauses inform a model whereby development corporations spring from local government initiatives and are not to be imposed by somebody with a map sitting in Whitehall. That brings me to my first question to the Minister. Clause 156(2) still reserves the power to declare urban development corporations independent of any local proposals—the Secretary of State can in fact sit behind a desk in Whitehall. Do the Government have in mind making any such designations, and if not, why do we have Clause 156(2) in the Bill?
My second question relates to the consultees listed in Clause 156(4), which inserts new provisions. Indeed, the noble Baroness, Lady Taylor of Stevenage, refers to that in her Amendment 407. A very good part of that clause says that local government is to be involved even if it is not the commissioning authority. There is then a less good list of what local government consists of. Very surprisingly, it does not include parish and town councils. They are not listed as statutory consultees, although district and county councils are. There is a parallel provision in the legislation for the urban development corporations to what we might call the green belt ones. In each case, parish councils are left out. In any normal use of language, they qualify as local government, do they not? They also qualify as legislative and statutory as well, so it is a great puzzle to me why they are not there. An important point is that they will probably be the best informed about their areas, and at a detailed level which certainly will be missed by county councils, for instance. I therefore want to hear from the Minister why parish councils are not statutory consultees.
The Minister may say that there is a catch-all here;
“any other person whom the proposing authority considers it appropriate to consult” is among the consultees. However, that is an option for the consulting authority, not a statutory consultation partner. If you want to rely on that catch-all, why not rely on it for county councils? If it is blindingly obvious that you would always consult a parish council, and therefore you do not need to say it, it must surely be blindingly obvious that you need to consult the county council, so you do not need to say that. If you are mentioning one, why not the other?
Secondly, what led to the omission of town and parish councils? If it was an oversight, will the Minister please correct it on Report or at least tell us that the inevitable statutory instrument will make it unambiguously clear that any town or parish council in or in the vicinity of a proposal should be consulted as a matter of course? I would be very happy to receive an answer by letter, if that makes it easier.
My Lords, as the noble Baroness, Lady Taylor, has explained, this group of amendments concerns development corporations. I am grateful for the broadly supportive comments from noble Lords for these provisions.
Amendment 403 probes the issue of local accountability, which was a theme picked up strongly by the noble Baroness, Lady Pinnock, whose amendment I will come to in a moment. One of the key priorities of the Government’s levelling-up agenda is to empower local leaders and communities. Introducing a new, locally led urban development corporation model will support local aspirations for regeneration without the need to establish a body accountable to central government, but which is instead accountable to local authorities. For it is local authorities—local councillors, elected by their local community—who will be the originators of the proposal and oversee the locally led development corporation, ensuring clear democratic accountability.
We completely recognise the importance of community involvement and participation in the creation of locally led development corporations. That is why we have included statutory public consultation arrangements for locally led urban and new town development corporations in the Bill, which proposing authorities must implement before submitting their proposal to the Secretary of State.
We intend also to use regulations to set out further details on the composition of board membership and aims of the oversight authority for locally led urban development corporations, as we did in relation to locally led new town development corporations in 2018. In appointing independent members, we expect the oversight authority to ensure that the board has the relevant skills and experience needed and includes those with an understanding of the local area.
I turn to Amendments 404 and 405. We recognise the importance of ensuring that appropriate scrutiny has taken place, including from the local community, where a proposal is being developed to designate the development area of a new settlement or urban development area and establishing a locally led development corporation. As I have mentioned before, we have included provisions for statutory public consultation where people can have their say on the proposals at the formative stage before it is submitted to the Secretary of State. When the proposal is received by the Secretary of State, they will look very carefully at the robustness of the plans, including at community involvement and views expressed, before making a decision on whether the proposal is expedient in the local interest and making an order to designate the development corporation’s development area.
The noble Baroness, Lady Taylor, asked whether all planning would become the responsibility of the locally led UDC and whether all powers would transfer from the local authority to the locally led urban development corporation. The answer is no—or rather, not necessarily. It is for local authorities to propose and for the Secretary of State to decide, under his discretion, whether and to what extent functions should transfer.
The noble Baroness and the noble Baroness, Lady Pinnock, also asked about the conformity of locally led UDC development with local plans. A development corporation that takes on plan-making or development management functions will be subject to the same rules as a local planning authority. I would be happy to fill out that answer in writing, if I may.
Amendments 404 and 405 are therefore an unnecessary addition to these consultation requirements. They would slow down the designation of development corporation areas. The purpose of designating the area is to determine the area in which the locally led development corporation will operate and deliver a programme of urban regeneration or a new town. There will be further opportunities for the local community to have its say on the planning proposals for the area as proposals for development come forward through the planning system.
Amendments 407 and 408 probe board membership. While I fully recognise that the amendments are well intentioned, they are not necessary. The appointment of board membership for locally led new town development corporations is already addressed in the New Towns Act 1981 (Local Authority Oversight) Regulations 2018. Those regulations provide that the oversight authority must have regard to the desirability of appointing one or more persons resident in, or having special knowledge of, the locality in which the new town will be situated. Addressing the point made by the noble Lord, Lord Stunell, this could include members of parish councils, local community groups or organisations which reflect the cultural, social or environmental priorities of the locality.
This is an approach that we intend to replicate for locally led urban development corporations, setting out further details on the composition of board membership in regulations which will be subject to parliamentary debate. In relation to the suggested minimum of three, it is the Government’s view that it should be up to the oversight authority to determine the appropriate board composition and numbers, based on local circumstances.
Amendment 409, which probes the issue of finance, is also not necessary, as provisions on accounting are set out in Schedule 31 to the Local Government, Planning and Land Act 1980 for urban development corporations. Under paragraph 13, an urban development corporation must submit a report to the Secretary of State at the end of each financial year. This must detail the corporation’s operations during the year, including a copy of its audited accounts. The Secretary of State must then lay the report before each House of Parliament.
Amendment 406 was also tabled by the noble Baroness, Lady Taylor, whom I hope will agree that England has a proud history of new town development. Well-planned, well-designed, locally led garden communities play a role, helping to meet this country’s housing and growth needs well into the future. Our garden communities programme has shown that new, locally led garden communities are delivering right across the country, with support from central government. As part of this, we are supporting 47 locally led garden communities across the country, from Cumbria to Cornwall. These schemes have the potential for over 300,000 homes by 2050. The garden communities programme is founded on the principle that new towns and villages must be locally led, not centrally imposed. It is local leaders and communities who know the specifics and needs of the area, and who can identify whether a new town is best for their area, rather than central government.
Finally, Amendment 403A, tabled by the noble Baroness, Lady Pinnock, and the noble Lord, Lord Shipley, addresses the issue of transparency and value for money of urban development corporations. Ultimately, accountability will sit firmly with either the Secretary of State, in the case of centrally led development corporations, or with the democratically elected decision-makers for the local authority or authorities or combined authorities in charge of the scheme, in the case of locally led and mayoral development corporations. As I have already indicated, legislative safeguards are in place on accounting, auditing and board membership for all existing development corporation types. Specifically, and to repeat, accounting, reporting, auditing, financial duties and board membership provisions for centrally led urban development corporations are set out in Schedule 31 to the Local Government, Planning and Land Act 1980.
Ebbsfleet urban development corporation, EDC, is the only centrally led urban development corporation. It already has a framework document, which sets out the broad framework within which the corporation should operate and the respective responsibilities and accountabilities of EDC and the department. EDC has its own independent board. As a minimum, the board should consist of the chair, four independent non-executive directors, three local authority members with one nominated by each of the three local authorities —Kent County Council, Dartford Borough Council and Gravesham Borough Council—and the chief executive. Except for the chief executive and local authority representatives, all appointments to the board will be made in line with the Governance Code on Public Appointments. The board is specifically responsible for establishing a transparency policy, which it has made publicly available, and ensuring that levels of transparency are compatible with the public bodies reform programme to increase levels of transparency in public bodies.
On locally led urban development corporations, I again emphasise that, before designating a locally led urban development area, the Secretary of State must be satisfied that it is
“expedient in the local interest”.
For the Secretary of State to be able to judge this, they will want to test the evidence on governance arrangements, value for money and deliverability to ensure that a project of such scale and complexity rests on sound foundations. As I have set out previously, we intend, as soon as possible, to set out in secondary regulations how an oversight authority is to oversee the regeneration of a locally led urban development area, including the composition of board membership, just as we did for locally led new town development corporations.
I hope that those comments reassure the noble Lord and the noble Baroness, and that they are content not to move their Amendment 403A. Equally, I hope that my remarks have been helpful to the noble Baroness, Lady Taylor, and that she feels able to withdraw Amendment 403.
My Lords, I am grateful to the noble Earl for giving us a detailed and thorough response, in spite of the late hour. It is much appreciated. As the noble Baroness, Lady Pinnock, said, this is an important clause in the Bill and we want to support it, because I agree with the noble Lord, Lord Stunell, that the way that development corporations work has generally been very effective. It has not worked everywhere, but in most places it has been very effective and has delivered at scale. It has created not just dormitory areas but real, proper communities, with all the infrastructure, which is exactly the model that we want to see for at-scale housebuilding going forward. We really want this to work; it is very important.
The noble Baroness, Lady Pinnock, raised the issue about Teesside, as I did. This is very important. It has made us all quite nervous to see the lack of transparency that there appears to have been in some of the decision-making there. That is making us concerned about this, so I hope that our amendments and the questions we have asked help us to clarify our thinking.
The noble Lord, Lord Stunell, raised the issue, as did I, of parish and town councils. That needs some thought: as the noble Lord rightly said, if we have specific mention of county councils and district councils in the consultation and it is not just assumed that they will take part, that should surely apply to parish and town councils as well. I do not see any reason why not. The Minister indicated that that might come through in a later statutory instrument, but we will be more reassured if the other types of council are included in the Bill.
On my question regarding the accountable body, perhaps the Minister could respond in writing. I have recently set up a town development board that is working on a billion-pound town centre regeneration project; that is not quite the same as a development corporation, but similar. The council has had to be the accountable body: the town development board has a mixture of elected and appointed people, and the decision-making on the finance has to go back to the council every time. I wanted to be sure about the role of this oversight authority. The Minister said that that might be subject to further information, to come at a later stage. Given the vast sums of public money that is likely to go through these bodies, it is important that we understand who will be accountable for that money and how, and who will monitor it and how.
The point the Minister made about these being locally led development corporations is really important. Those of us who experienced them in the 1950s will remember that the approach was very top-down. I know that that is not in anybody’s mind these days, as doing it that way does not work any more. We do not want to go back: it is very important that they are locally led and there is local input all the way through the development of the proposals. It was reassuring and helpful to hear that planning proposals by development corporations will go through the planning system in the same way, so there will be public inquiries, presumably, and publicly held meetings about the plans and proposals.
I heard the Minister say that the Local Government, Planning and Land Act requires financial reporting from development corporations to the Secretary of State, and a report to then be laid before Parliament. I look forward to reading the annual report for Teesside’s mayoral development corporation when it is made public; it will be very interesting to see what it says.
The Minister mentioned the garden communities. I will not step on any corns regarding East Herts District Council, which has just completed a garden village proposal—and where the Conservatives lost 17 seats a couple of weeks ago. In general, the garden communities are a very good thing; they are well-planned communities with the infrastructure needed to support them.
The Minister referred to the Secretary of State approving the governance and deliverability plans before designating a development corporation. Finance should be included as well. I do not know whether that is what he intended, but it is very important.
There are some issues still to be clarified, but we are all generally supportive of locally led development corporations. We may come back to these issues on Report, when we have further information, but for now I beg leave to withdraw the amendment.
Amendment 403 withdrawn.
Amendment 403A not moved.
Clause 156 agreed.
Amendment 404 not moved.
Clause 157 agreed.
Amendments 405 and 406 not moved.
Clause 158 agreed.
Schedule 13 agreed.
Clauses 159 to 162 agreed.
Schedule 14 agreed.
Clause 163: Removal of restrictions on membership of urban development corporations and new town development corporations
Amendments 407 and 408 not moved.
Clause 163 agreed.
Clause 164 agreed.
Amendment 409 not moved.
Clause 165: Acquisition by local authorities for purposes of regeneration
Amendment 410 not moved.
Clause 165 agreed.
Amendments 411 and 412 not moved.
Clauses 166 and 167 agreed.
Clause 168: Conditional confirmation