Planning (Compensation, etc) Bill:  Second Stage

– in the Northern Ireland Assembly at 11:30 am on 7th November 2000.

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Photo of Mr Sam Foster Mr Sam Foster UUP 11:30 am, 7th November 2000

I beg to move

That the Second Stage of the Planning (Compensation, etc) Bill [NI 7/00] be agreed.

This Bill repeals various compensation provisions in the Land Development Values (Compensation) Act (Northern Ireland) 1965 and the Planning (Northern Ireland) Order 1972. It also corrects the drafting error in the Planning (Northern Ireland) Order 1991. Similar compensation provisions were repealed in Great Britain in 1991.

It will help to explain the purpose of this Bill if I first set out the background of the provisions that are to be repealed and amended. By far the most significant of these provisions are contained in the Land Development Values (Compensation) Act, which for simplicity’s sake I will refer to from now on as the 1965 Act. Before the introduction of this Act the position in Northern Ireland was that compensation could be paid for refusal of planning permission or for permission granted subject to conditions.

In recognition of the fact that the planning system was for the benefit of the wider community, and not just for an individual, the Government at that time decided that they could no longer justify paying out such compensation indefinitely, especially when land values had been largely created by the actions of the state rather than the individual. Parts I and II of the 1965 Act sought to establish a system of compensation which placed a once-and-for-all development value on land as determined at a fixed date. The fixed date was 25 February 1963. The system worked like this. Part I of the Act required a landowner who believed that his or her land had a development value to apply to the then Ministry of Development for a determination of that value. All applications had to be submitted by 4 February 1968. The calculation of the development value was based on the difference between the unrestricted value of the land on 25 February 1963, and the restricted value on the same date.

(Mr Deputy Speaker [Mr McClelland] in the Chair)

The unrestricted value was simply the value of the land, taking account not only of its existing use but also of any potential land value for a more profitable or new development. The restricted value was the value of the land with existing use only. Schedule I of the Act defined existing use development. All other development was to be regarded as new development. An area plan was given a development value only if the unrestricted value exceeded the restricted value by 10% or more.

Part II of the Act mainly provided for the assessment and payment of compensation. To make a claim, four criteria had to be satisfied: first, the land in question had to have a development value, determined under Part I of the 1965 Act; secondly, a permission for new development had to have been refused or granted subject to conditions; thirdly, the value of the land had to have depreciated because of the refusal or conditional permission; and fourthly, no compensation had to have been paid in respect of the land under previous planning legislation. If these criteria were satisfied, a claim could be paid, but it was restricted to the development value previously determined under Part I of the Act, which was calculated at 1963 prices.

Given this restriction, and to offset the effects of inflation, it will come as no surprise to Members that most claims were made and paid in the 10 years or so following the date on which the Act was passed. It has been some time since any payments have been made under parts I and II of the Act. We do not believe there are any significant outstanding claims under these parts, and they are now regarded as obsolete and ready to be repealed, with one exception. Part II of the Act also provided for the recovery of compensation by the Ministry if new development was later permitted on the land in question. I believe that it is appropriate for the Department to continue to recover compensation in these circumstances, and this provision will be retained in the Bill.

I will move on to part III of the 1965 Act and, in particular, to section 29. The section stands separate from parts I and II, and provides for compensation to be paid

"where a planning application for development, other than new development, is refused or permitted subject to conditions, and where the refusal or conditional permission results in the depreciation in the value of the land".

As I have explained, development other than new or existing use development is defined in schedule 1 to the Act. The definition has several parts, and the part that has given rise to all recent payments by my Department concerns a refusal to permit the rebuilding of any building that was in existence on 4 November 1965 or was destroyed or demolished in the five years before that date.

Section 29 was regarded as an exceptional clause to provide for compensation on the rare occasion when an application for existing use development was refused. No part I development value determination was needed to claim under the section and payments were at current values. However, planning policies inevitably change to reflect the needs of society, and what may have been regarded as "existing use" in 1965 is hardly so 35 years later. Section 29 has long ceased to be an exceptional clause. It is used all too frequently and has resulted in annual payments of around £100,000 by my Department for the past 10 years. The trend is very much upward and current liability could be as high as £2 million. There is no justification for continuing this drain on public funds, when the general principle behind modern planning law is that compensation is not paid when planning permission is refused.

This is the position in the rest of the United Kingdom. Moreover, the refusals have little to do with replacement buildings, which a number of Members are concerned about. In many cases where claims are made under the rebuilding criterion set down in schedule 1 to the Act, the original building no longer exists in any recognisable form, and has lain derelict and unused for many years. There is also a growing suspicion that section 29 is being abused and that planning applications are being made for the sole purpose of attracting compensation. I will speak more on this later.

I propose to repeal section 29, although, as with part II compensation, I propose to retain the right to recover payments already made where development is later permitted. The Bill will also repeal article 64 of the Planning (Northern Ireland) Order 1972. The Order provides for

"compensation for a refusal of consent for alteration or extension of a listed building where the alteration or extension does not constitute development for the purposes of requiring planning permission".

It makes little sense to pay compensation in respect of a control that was introduced to protect listed buildings. This is also the position in the rest of the United Kingdom, where similar provisions were repealed in 1991. There are no records of any payments under article 64.

The final purpose of the Bill is to correct a minor drafting error in the Planning (Northern Ireland) Order 1991, a cross-referencing error in article 121 relating to rights of entry.

The application of the Bill as outlined in clause 4 provides that those parts repealing existing compensation provisions

"shall apply to applications for planning permission or listed building consent made on or after 23 October 2000", which is the date on which the Bill was introduced in the Assembly. After the Bill becomes law, no claim for compensation will be paid when planning permission or listed building consent is refused for planning or listed building consent applications made on or after 23 October 2000. All other claims, including those already in the system, will be processed as normal under section 29 of the 1965 Act.

It may seem odd to introduce these provisions in this way. However, the reasons for doing so are justified. In Great Britain, where similar provisions were repealed in 1991, the legislation was made effective for planning or listed buildings consent applications received on or after the date on which that Bill was introduced in Parliament.

The purpose of such action is to avoid a situation in which the Department is inundated with applications between the date of introduction and the date on which Royal Assent is granted for the purpose of securing compensation before the Bill becomes law. I decided not to consult on the Bill to avoid a similar situation arising with such applications. I did, however, discuss it briefly with the Environment Committee. My Department’s liability under section 29 has increased significantly over the past year or so, and I believe that this is at least partly due to the fact that agents have been more active in generating business in this area because of an increased expectation that section 29 was to be repealed.

I am concerned that section 29 is being used, not as was intended in 1965 to compensate those who genuinely intended to develop their land, but rather for the sole purpose of attracting compensation. Agents telephoned my officials and expressed surprise, albeit a pleasant surprise, that section 29 remains in existence in Northern Ireland, although the equivalent section was repealed in the rest of the United Kingdom in 1991. Payment has been made where an applicant has openly admitted that he was seeking a refusal for his planning application. This situation is a drain on the public purse and must stop as soon as possible. As landowners have had 35 years to make an application under these provisions, clause 4 is reasonable and justified.

The main thrust of this Bill is to end a system of compensation that is unique to Northern Ireland, a system that was introduced 35 years ago and which has little relevance in 2000. It will also stop an increasing and unjustifiable drain on the public purse. I commend it to the Assembly.

Photo of William McCrea William McCrea DUP 11:45 am, 7th November 2000

I thank the Minister for his statement. The House will welcome the general principles of the Bill, as outlined. The Bill is long overdue, as similar provisions in England and Wales were repealed in 1991, and this delay concerns me. While the Minister is not responsible for the past, many of the same officials are still in the Department, so why has it taken so long to introduce this legislation here? Why were people able to abuse the system from 1991 to 2000? How much compensation has been paid since 1991 that could have been saved to the Exchequer? The Bill will end this system of compensation. The Minister mentioned one specific case, but is there real evidence that the system was being abused?

The Bill corrects an error in the Planning (Northern Ireland) Order 1991, and I am concerned that this was not corrected earlier. What has been the effect of this error, and why has it taken so long for it to be corrected?

Under section 29 of the 1965 Act, compensation could be reclaimed if development was later permitted. The intention is to retain that right to recover compensation. How often has this happened, and how much compensation has been recovered? The Minister should note that the Environment Committee will look at the Bill in detail during its Committee Stage. According to paragraph 19 of the Explanatory and Financial Memorandum, consultation did not take place on this Bill, but I understand the Minister’s explanation, and I thank him for speaking to the Committee on this matter.

The Committee may feel that consultation is now required, which could extend the Committee Stage of this Bill. I will conclude by saying that the Environment Committee looks forward to working with officials and discussing the Bill further.

Photo of Mrs Joan Carson Mrs Joan Carson UUP

I am prepared to give the legislation under discussion a general welcome, although I have misgivings. The Minister is proposing to make legislation in Northern Ireland more uniform with that in the rest of the United Kingdom. It will take a long time for the Assembly and the Executive Committee to undo the years of the lackadaisical low marking of direct rule. I commend the Minister of the Environment for his efforts to address this issue.

If there were doubts about the poor legacy left to the Province from direct rule, we can point to the fact that this legislation replicates provisions made for England and Wales almost a decade ago. The Assembly often laments 25 years of financial underinvestment and lack of planning in everything from the railway system to the Health Service. There was also underinvestment and a lack of planning in our legislative procedures. I am glad that we now have an opportunity to make a full contribution to that progress.

I regret that my contribution to this debate cannot be entirely positive. The shades of direct rule hover over this legislation. I am disappointed that there was no consultation on the Bill. The Department of the Environment was concerned that advance notice of the provisions might encourage pre-emptive compensation claims. I recognise the concern, but not disclosing information is not the best method a Department could employ in preparation for a heavier mailbag.

Photo of Mrs Joan Carson Mrs Joan Carson UUP

No. I am sorry, but I have visitors waiting.

This lack of consultation has excluded many people who have a right to be involved. I represent the largely rural constituency of Fermanagh and South Tyrone, and there are many in the rural community who have a view. They will feel slighted at having been ignored. There will also be many in the rural community who will interpret the proposed abolition of compensation in respect of planning applications for replacement dwellings as an attack on them.

I do not want to contradict my welcome of this replication of Westminster legislation, but I wish to ask for confirmation that Northern Ireland merits the level of replication proposed. In any claims procedure there will be a few rotten apples, but those who have made genuine claims should not be penalised as a result. There may be a reasonable explanation for this, although it is a concern. Perhaps the Minister would describe a typical claim made to his Department under the provisions of the Land Development Values (Compensation) Act (Northern Ireland) 1965. I would also appreciate the Minister’s explanation for his decision that the provisions will apply from the date of the Bill’s introduction to this Assembly, rather than from the appointed day on which the Bill will become law. Retrospective application may be considered underhand by some. It would be useful to have an indication of what savings might result from this decision.

In a similar vein, I note that the provisions giving rise to compensation are to be repealed, but not those allowing the Department to recover compensation already paid. I recognise that the circumstances in each case are different, but I feel it would be better to repeal the latter as well as the former. Otherwise, it will be hard to escape the perception that the Department is happy to apply one rule to itself and another to the general public. I generally welcome the Bill, although I would like some reassurance on the points I have raised.

Photo of Alban Maginness Alban Maginness Social Democratic and Labour Party

This Bill is very welcome, for it is a long-overdue tidying-up exercise. The fact that we are nine years behind Britain in this matter speaks volumes. I accept the points that Rev William McCrea, the Chairperson of the Environment Committee, made. This Bill underlines the value of having this Assembly and devolution in Northern Ireland. I ask Mr McCrea and certain of his Colleagues to reflect on that and to appreciate the value of this Assembly and the Good Friday Agreement. I hope that Mr McCrea will —

Photo of Edwin Poots Edwin Poots DUP

On a point of order, Mr Speaker. Is this in relation to the Bill?

Photo of Alban Maginness Alban Maginness Social Democratic and Labour Party

It certainly is in relation to the Bill.

I hope that Mr McCrea will reflect on the fact that a Minister is coming to this House with a significant piece of legislation tidying up an anomaly in the law which permits people to enter applications for planning permission in the hope of being refused and thereby securing compensation. That is clearly an abuse. Of course, there may well have been genuine applicants. However, the level of compensation claims indicates some — I believe, serious — element of abuse. I welcome the fact that the Minister has come to the House at the earliest opportunity with this legislation to prevent such abuse from continuing.

I take issue with Assembly Member Joan Carson, who has now left the House, in relation to the retrospective application of this Bill. It is quite proper that the Minister should choose the date of the introduction of the Bill to this House, for it prevents belated applications from people who know that this Bill is going through the House but hope to benefit. The Minister is right to give a retrospective date as a cut-off point. Otherwise, quite frankly, further abuse would have taken place.

Can the Minister be more precise about the amount of compensation paid out? He has told us how much compensation might be in the pipeline, but not what compensation has already been paid or what moneys have been recovered by the Department in those cases where development took place after compensation was granted to applicants.

I also commend to the House the fact that the Department, in its wisdom, when considering the various options, rejected the do-nothing scenario. Everyone will accept that.

The alternative was to relax planning policies on dwellings in the green belt, which would have been disastrous. Most of us who serve, or have served, on local councils know the difficulties this creates. As good environmentalists we wish to preserve as much as we can of the green belts around our urban areas. Therefore I congratulate the Department on its refusal to go down that road, which would not be for the common good. It would have assisted in the erosion of our green belts — something which should be resisted strenuously by the Department and the Assembly.

12.00

On behalf of the SDLP, I give a general welcome to this Bill, which is long overdue. I hope that the House will support it and prevent further abuses. Those who have already made applications will not be disadvantaged by this legislation. I congratulate the Minister on introducing it.

Photo of Edwin Poots Edwin Poots DUP

Our party broadly welcomes the Bill. Members will not be getting from the DUP the confused messages that they got from Mrs Carson. She appeared to be supporting the Bill on one hand and criticising it on the other.

It would have been grossly incompetent of the Department to have failed to introduce the Bill retrospectively. Until Royal Assent was granted, there would have been a mass rush to make claims to the Department. If there has not been a significant number of claims over the past few years, there would have been in the coming months. The Minister, in his winding-up speech, could indicate how much money has been paid out since 1991 because a number of figures have been bandied about. There was £100,000 per year; the figure of £900,000 still in waiting, and we have the potential figure of £2 million. Has money been paid out in the past nine years, or has it been accepted that money will be paid to these people? Why is there still £900,000 in the pipeline?

The Committee will welcome the opportunity to look at this Bill, to scrutinise it closely and perhaps to make some modifications. I am particularly concerned about the item on listed buildings, and I want to examine that more closely, so that we do all that we can to ensure that our built heritage is maintained. Nothing in this Bill should deflect us from that. At present, the Bill adequately addresses this point, but further consideration will be needed at Committee Stage.

Photo of Mitchel McLaughlin Mitchel McLaughlin Sinn Féin

Go raibh míle maith agat, a LeasCheann Comhairle.

Sinn Féin also welcomes the introduction of this Bill, and I assure the Minister that we will give our general support to the principles underlining his approach. We congratulate him for moving so quickly, given that there has been a considerable time lag in the North of Ireland in relation to that.

We are talking about trying to create a planning system that operates on the basis of equality and which is for the common good, and we are conscious of the need for the interrelated development of the whole island of Ireland.

To that extent we welcome the approach taken by the Minister. This legislation is being introduced with a view to stopping exploitation of the planning system by landowners. That exploitation mainly takes a form, as has been described, of applications being made for planning permission which is clearly not going to be granted, for listed buildings, for building in areas where green-belt policies apply, or for building in areas where no development is generally intended. Then these applications are used as a basis for compensation claims. We offer support to the strategy that was outlined by the Minister, in relation to both retrospection and clawback. It is a sensible and just approach, and it will attract support from across the Chamber.

Clearly, a review of the legislation is genuinely required by planners, so that they can make decisions in the common interest, and not with a view simply to minimising cost claims against the Department of the Environment. We are talking about reducing anomalies and bad law. Some issues have been mentioned by other Members already. We are not talking about abuse; we are talking about the exploitation of legal provisions. We need to know that what was, in effect, created out of the Matthew Report in 1965 was a charter for compensation which was exploited to the full.

The anomaly to which a number of Members have referred requires answers. Why was it allowed to continue for so long? What was the total cost to the public purse? We are talking about bad law, and it always was bad law. We have to welcome the steps that are being taken to change it. We congratulate the Minister and look forward to working with him through the Committee Stage on the detailed issues that we all want to address.

This is an opportunity to correct a wrong that was actually created, as it happens, by the former one-party system that operated here in Stormont. We can use this opportunity to demonstrate that there is a better way in the modern world that is going to be good for politics generally. We congratulate the Minister and offer him our support.

Go raibh míle maith agat.

Photo of David Ford David Ford Alliance

It is unfortunate perhaps that so many Members from the Environment Committee are speaking in this debate. I will not rehash everything that has been said by others, except to say that, on behalf my colleagues, I welcome the Bill. I hope my welcome to the Minister’s proposal is as extensive as that of the DUP, the SDLP and Sinn Féin and somewhat more generous than that from his constituency and party colleagues. Although there clearly are concerns about issues like consultation, I am certainly inclined to agree with what the Committee Chairperson said. We may now need to examine the issue of consultation in greater depth than the Committee, but the Minister was entirely right to put the date of 23 October 2000 into the draft Bill so that we can ensure that no further anomalies are allowed through.

There is a fundamental and legitimate question to be asked about why payments were ever made to people for not doing something that would have been detrimental to the public good. This does not apply just in the planning system; there are other areas that the Minister is concerned about. Questions need to be asked about other aspects of Government policy. Maybe we need a complete review, and perhaps we need to decide whether we might need something more like site value rating rather than the current rating system. However, I suspect that is a little beyond this Bill and its legitimate area.

On section 29, the Minister quoted a liability of possibly as much as £2 million, whereas his Department’s notes say £900,000. That is a fairly wide range, thought I accept that the area is a little bit unspecific. However, particularly given the limited budget his Department has and the difficulty which those of us as members of the Committee know exists with funding for the EHS and planning, can the Minister give us an assurance that he will seek to get back from the Minister of Finance any savings which will result from the passing of this Bill? Will those savings be spent for the benefit of his Department, and will he make a good case to the Minister of Finance for £2 million and not £900,000?

Photo of Jim Wells Jim Wells DUP

I strongly welcome the proposed amendment to the legislation although, like many others, I have to ask why we are sitting here nine years after equivalent amendments were made to legislation in the rest of the United Kingdom. I would be interested in the Minister’s answer to the question put by Mr Poots and other Members concerning the amount of taxpayers’ money poured into the pockets of landowners as a result of the delay in implementing the amendments.

The original legislation was an anachronism from the word go. For 35 years, speculative developers have submitted applications in the full knowledge that they would be refused in the hope of obtaining compensation. It reminds me of a similar piece of legislation, the Wildlife and Countryside Act 1981, which operated in England, Scotland and Wales. Under that Act, people could submit applications to destroy some ancient woodland, or drain some bog, even though they had no intention of doing so. It was their hope that the application would be turned down, thus triggering a huge amount of compensation. That brought the legislation into disrepute, and it was not adopted in the Nature Conservation and Amenity Lands (Northern Ireland) Order 1985.

It must be remembered that all applicants and developers have the benefit of full and open consultation during the formulation of development plans. They all come before public inquiries. If a developer’s land is zoned for a certain activity, and he objects to that, he has the opportunity — in a democratic fashion — to go to a public inquiry and make representations to the Department. Similarly, if an individual application is turned down, it may be taken to the Planning Appeals Commission, and generally they are given a fair hearing. Indeed, one quarter of all planning appeal decisions overturn the Planning Service’s original decision.

Therefore the Province has an equitable planning system. As politicians, we do not always agree with the decisions that are eventually reached, but we usually feel that everyone has received a fair hearing. Why, with all those opportunities, should someone have the right to have a second bite at the cherry and claim compensation?

One hundred thousand pounds strikes me as a considerable amount of money. It could be used to employ four extra staff in a divisional planning office. The Planning Service is under enormous pressure at the moment because of the upsurge in the number and complexity of applications. The last thing the Planning Service should be doing is handing out £100,000 per annum in compensation. I suspect that if the Department were to examine the actual cost of dealing with those applications, it would find that a considerable amount of money is being spent on legal costs and the assessment of compensation levels. Frankly, this amendment to the legislation could not have come quickly enough.

Mrs Carson made a point, and I have to say that her logic was extraordinary. She criticised the Minister — which was surprising in itself, because they are Colleagues from the same constituency and party — for including an element of retrospective application in the legislation. It is unfortunate that Mrs Carson has left the Chamber, because I would like her to think through the logic of her position. Consider what would have happened if the Minister had announced to the House a few weeks ago that he was minded to make this amendment to the legislation and that the opportunity of compensation due to the refusal of a planning application was to be removed.

There are interesting parallels with the Housing Executive’s decision a few years ago to withdraw improvement grants for a period because money was running out. There was a veritable stampede of applicants to the Housing Executive’s district offices to get applications in before the drawbridge was pulled up. If the Minister had made a similar announcement, hundreds of applications for planning permission would have been lodged with divisional planning offices throughout this Province, all with the express intention of being turned down in order to claim compensation.

I must declare an interest, which I can assure you is on the Members’ Register. I studied planning at Queen’s University, Belfast, and during my various attempts to develop a political career — most of which were unsuccessful, and I think this one is doomed as well — I attended public inquiries and lodged planning applications and so on on a freelance basis.

I have to confess that I did not handle any specific applications for compensation, although I came across several of them. Any good agent would have been going around all his clients in the Province urging them to get their applications in before the deadline for the withdrawal of compensation. The Planning Service, which is already under the most enormous pressure from the number of applications, could not have coped with such demand. It would have brought our divisional planning offices to a standstill, if it had happened.

The Minister is therefore absolutely right to apply this Bill from 21 October. He has been fair to the people who have already lodged applications. The dogs in the street, as far as planning circles are concerned, knew that this change was coming. Once the 1991 amendment was applied to the rest of the United Kingdom, it became obvious that we in Northern Ireland would eventually follow suit. There has been an increase in the number of applications under the existing provisions. Once it became apparent that changes would be made, the whole system would have ground to a halt. However, the Minister has enabled those who got their applications in before 21 October to proceed with their claims, and that is a very fair way of doing things.

None of us like the retrospective application of legislation. There are always enormous constitutional difficulties with doing so, but on this occasion the Minister is absolutely justified, particularly as he has informed us this morning that they have already assessed a liability of at least £2 million — and that is without stimulating demand. The Planning Service needs that £2 million to carry out its present work, particularly in the preparation of area plans. It does not need to pour that money into the pockets of speculative developers.

The Planning Service, by granting planning permission, adds enormously to the value of land in this Province. Recently I was shown a site near Ballynahinch where one could hardly graze a goat, and the individual had bought it with planning permission for £70,000. I cannot believe the prices that sites are now going for in green belt areas of the Province. Therefore it is ridiculous to let people have their cake and eat it. The provision whereby they can apply for planning permission, get a huge increase in the value of the land if it is granted, or claim compensation if it is not, is an anachronism that should have been abolished long ago.

However, the question we all want to ask this afternoon is how much taxpayers’ money has already gone down the drain due to the delay in implementing this legislation.

Photo of Mr Sam Foster Mr Sam Foster UUP 12:15 pm, 7th November 2000

I thank all Members for their comments — the complimentary remarks and the brickbats — for I appreciate them all.

The Land Development Values (Compensation) Act (Northern Ireland) 1965, whose provisions formed the main plank of the repeals contained in the Bill, is a complex piece of legislation. In fact, when I looked at the Hansard Report of its introduction in 1965 I noted that one Member commented that

"if he had a choice between going to purgatory and reading this Bill, he would be very tempted to take the former choice".

Judging by the great interest shown today by Members, that sentiment does not apply to this Bill.

However, the strength of the Bill is not that it removes complex provisions from the statute book. Its strength lies in the fact that it removes provisions that have no relevance in the twenty-first century, and it brings Northern Ireland into line with the rest of the UK as regards the law on planning compensation.

Also, it confirms the long-established principle within a modern planning system that compensation is not paid for a refusal of planning permission, and, very importantly, it puts an end to an unnecessary drain on the public purse, which is showing no signs of abating.

I want to emphasise the fact — and good questions have been asked on the subject — that it is public moneys that we are dealing with here. We are the Government, and we have a responsibility to guard public moneys well. That is why I am taking the current steps.

I will try to answer Members’ questions. My officials will peruse Hansard, and if a question should be left out, they will certainly follow up with a written answer.

Mr McCrea asked about why there was a delay in following Great Britain. While similar provisions were repealed in Great Britain through the Planning and Compensation Act 1991, that Act introduced a package of changes to planning law concerning development control, enforcement, and compensation. It also provided for a plan-led system in Great Britain.

The former Department of Environment started work to replicate this package for Northern Ireland, but I understand that this work was interrupted on several occasions to consider further changes being talked about in GB, particularly those concerning the removal of crown immunity from planning law. However, when the matter was brought to my attention and I saw the amount of money involved, I acted immediately and asked for these repealing provisions to be separated from the package and included in a Bill for the Assembly.

I am not sure how much compensation has been paid since 1991, but it is in the region of £1 million.

Mr McCrea asked what effect the drafting error in the Planning (Northern Ireland) Order 1991 has had. Legal advice states that it has had no practical impact and that it is just a matter of correcting the error.

I was asked how many cases had been recovered and what the value was. I have no figures to hand, but £500,000 is believed to have been recovered.

Evidence of abuse is largely anecdotal, but officials have received phone calls from agents expressing surprise that these provisions are still in place. This indicates more interest in compensation than in planning.

Mrs Carson asked for an example of a typical claim for compensation. A compensation claim starts when a planning application is made to the Department based on payments already made. The application is usually for the reconstruction of any building that existed in 1965, or during the five years before that date, but had been destroyed. Typically, the original building would no longer exist in recognisable form, and in many cases there would be no indication that it ever existed. Typically, the application would be to rebuild on the green belt. Under the Department’s existing policies, the application would be refused. It would be regarded as an existing use development under schedule 1 to the Land Development Values (Compensation) Act (Northern Ireland) 1965. Once the application is refused, there would be an entitlement to compensation under section 29 of that Act. The case would be referred to the Valuation and Lands Agency, who act as our agents in these cases. They would negotiate with the applicant, whose claim would be based on the difference between the value of the land with planning permission and its value without it. There are significant sums involved, and recently we agreed the value of a claim at £275,000. That is a great deal of money, and it is the reason I intend to retain the provision in the Land Development Values (Compensation) Act (Northern Ireland) 1965 to recover any compensation paid where scheduled development is later permitted on the site.

Mrs Carson also asked why the provisions should not be applied retrospectively. In Great Britain similar provisions were repealed in 1991, and the new provisions took effect from the date of the Bill’s introduction in Parliament. That was to prevent the Department from being inundated with planning applications to gain compensation between the date of introduction and the date of Royal Assent. This is justifiable as there is growing evidence that applications are not being made because there is a desire to develop the land, but for the purpose of gaining compensation.

The cut-off date of 23 October 2000 does not apply to compensation claims but to applications for planning permission or listed building consent. Any compensation claim made before 23 October will be processed in the normal way. The process is deemed to have started when an application is made.

Mr Alban Maginness’s question about the preciseness of the compensation already paid was answered in my reply to Mr McCrea.

Mr McLaughlin’s and Mr Poots’s questions were also answered in my reply to Mr McCrea.

Mrs Carson and Mr Ford asked what the savings would be if the Bill is introduced. It is difficult to quantify that, but the figure of £2 million suggests that there would be significant savings in the future.

Mr Ford referred to the difference between the £900,000 and the £2 million referred to in the statement. The figure of £2 million reflects the updated position.

Jim Wells — and I thank him for his complimentary remarks — also asked how much compensation has been paid. As far as I am aware, that has been answered.

I hope I have addressed the Members’ questions satisfactorily. I am sorry if any questions or points have been overlooked. My officials will scrutinise Hansard, and I will write to Members whose questions have not been answered. I thank Members for their interest.

Question put and agreed to.

Resolved:

That the Second Stage of the Planning (Compensation, etc) Bill [NIA 7/00] be agreed.

The sitting was suspended at 12.25 pm.

On resuming —