Clause 95

Localism Bill – in a Public Bill Committee at 2:30 pm on 17th February 2011.

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Question proposed, That the clause stand part of the Bill.

Photo of Heidi Alexander Heidi Alexander Labour, Lewisham East

I seek clarification on proposed new section 216A(1) of the Planning Act 2008, which gives local authorities the ability to pass on CIL to a person “other than that authority”. Will the Minister clarify the Government’s intentions?

Photo of David Ward David Ward Liberal Democrat, Bradford East

I want to express my general views on CIL and set it within a context for the record. I tabled an amendment, which I have since withdrawn, on this general issue of what to do with CIL receipts. As a councillor, I was very keen on section 106 funding because not many councillors knew about it, but my colleagues and I did. We used it quite effectively in our ward. The funding is quite constrained, and we would have liked far more discretion on using it outside the immediate area of the development and on more specifically targeted initiatives within the ward. Nevertheless it was very useful. I am pleased to be able to make these comments, because I am confused about section 106 funding and how it fits with CIL

We are looking to increase the discretion and flexibility of local authorities on spending money. I cannot remember the figure for the specific ring-fenced grants that are available to local authorities, but it is very high. That money was freed up by the comprehensive spending review and announced in the local government settlement. One of the strong messages was that at a time when local authorities were facing financial difficulties, they were at least being allowed more discretion over some of their specific funding and direct grants. I welcome that, but why do we not extend it to CIL, too?

It would be helpful if local councillors were allowed to use the proceeds from CIL for purposes other than the building or upgrading of local infrastructure. If they want to spend it on that, let them, but it should be at the discretion of local authorities. That would allow local residents to directly benefit from large developments in their area. The authority itself may want at different times to share out the CIL receipts when it is appropriate to develop areas other than those directly related to a particular development. It gives authorities the ability to time and phase the release of receipts to particular projects. We seek to clarify that issue through any necessary amendments, but the general gist is that we prefer the discretion and would not like to see CIL specifically locked into infrastructure developments.

Photo of Barbara Keeley Barbara Keeley Shadow Minister (Communities and Local Government)

Moving on from the hon. Gentleman’s questions, I have a couple of points. My local council, Salford city council, has some concerns about this, and I have some questions. There is a fear that, even though a levy called the community infrastructure levy is being retained, it may not be possible to use the funds to fund required infrastructure. When the regulations are drawn up, will they specify that the other person specified will  be required to spend those funds on infrastructure? I understand that infrastructure means many different things. In some cases, it might be roads, in others play areas or youth facilities. There is a whole variety of things that it could be, and those properly should be decided locally. Will the levy have to be spent on infrastructure? That is absolutely key.

We are also concerned to know what proportion might go to other persons and what proportion might be retained, because, as my hon. Friend the Member for Lewisham East has said, that is not clear. Too much uncertainty surrounds the matter as it is specified in the Bill.

Photo of Jack Dromey Jack Dromey Shadow Minister (Housing)

I have two questions. First, following on from my hon. Friend the Member for Worsley and Eccles South, are the Government concerned that councils may use the levy for projects that are not related to infrastructure or business development? Secondly, some concerns have been expressed about the loose definition in clause 95 of expenditure. Subsection (3)(b) refers to:

“expenditure on future ongoing costs”.

For clarity, perhaps the Minister can provide the Government’s interpretation of “ongoing costs.”

Photo of Greg Clark Greg Clark Minister of State (Department for Communities and Local Government) (Decentralisation and Cities) (also in the Department for Business, Innovation and Skills)

I am grateful for the questions, because they give me the chance to say a little more about our intentions. As I have said, we were minded not to repeal CIL, and we thought that it was best to make use of what is on the statute book. We think that the current definitions are constraining in a number of respects, as I mentioned in relation to affordable housing and whether it should be considered part of the infrastructure. We want to reflect on that, and I intend to consult before making use of the powers that are available here.

A balance must be struck in the community infrastructure levy. It is an opportunity to have local people recognise that development is not against their interest but contributes to a better community for them. Indeed, the more they feel that that is the case, the more likely they are to accept and even encourage development and so, as it were, the cake grows. It is important to see the uses to which these funds can be put as a means of encouraging development by allowing people to participate in the returns. At the same time, that must be balanced against the explicit and quite specific need to provide the roads that connect the developments to the rest of the community.

It is worth reflecting, in the way that the hon. Member for Worsley and Eccles South suggested, on whether the proposals are drawn in precisely the right way at the moment, and on whether local communities should have more discretion over how the funds are deployed, which is the point that my hon. Friend the Member for Bradford East made. It is worth reflecting on that so that we can achieve the right balance between ensuring that we have enough funds to provide the roads, railways and other contributions, and ensuring that we are making greatest use of the possibility for people very locally to see some benefits of development.

We will, therefore, consult on that, and I want to reflect on two aspects of it. Consistent with the approach that we are taking of amending rather than repealing or replacing the measures, the question of the definition of infrastructure is important. We must consider whether affordable housing is a legitimate opportunity. In addition,  providing a piece of infrastructure that is funded through CIL and not being allowed to contribute to its maintenance costs in the future, seems to me to be a rather perverse situation. If one can build something that is clearly a piece of infrastructure but one does not have the funds to maintain it in good condition, we should reflect on that. In answer to the question that was raised by the hon. Member for Birmingham, Erdington, we are looking at the ongoing costs, which are what we have in mind. We will consult on that, however.

The other aspect, which the hon. Member for Lewisham East raised, was the question of other bodies. This addresses directly the point made by the hon. Member for Worsley and Eccles South about neighbourhoods in the city of Salford. We think that there should be an expectation that the people who are directly affected by development should have some entitlement to share in its benefits, which should not be kept at a higher level. There should be some obligation on the part of authorities to share benefits with the people who are affected, in much the way that the hon. Member for Bradford East mentioned. We want a proportion to be spent locally, either by the local authority, or, if there is a democratic body below that level, perhaps devolved to that body. Again, that will be the subject of consultation and further measures in regulatory form, should we find that there is support for it.

I am grateful for the opportunity to air these matters. I know that the council in the constituency of my hon. Friend the Member for Milton Keynes South has some interest in it, and there is interest across the country. This is an important opportunity to amend the provisions that we have inherited to see whether they could be made just a little more pro-neighbourhood and pro-development, while not losing the important prize of providing infrastructure. I hope that that clarifies the clause.

Photo of Nick Raynsford Nick Raynsford Labour, Greenwich and Woolwich 2:45 pm, 17th February 2011

I had not intended to contribute to this debate, but I feel that I have to say something. What the Minister has been saying is, in many ways, admirable. He is clearly wrestling with difficult issues and trying to come up with the most sensible solutions, and I wholly support that. However, this is an abuse of the legislative system. We are considering legislation, and the convention is that the Government come forward with agreed policy, and the detail of how that policy will apply should be available for the Committee to scrutinise so that we can satisfy ourselves that their properly defined proposals will work. We simply cannot do that. We have been asked in this whole section to accept a series of assurances from the Minister that he will consult, think further and make changes. Unless he does that to an extraordinarily tight timetable—when I asked him a question on an intervention about the timetable, he was not able to give a precise answer, and I am not surprised—we simply will not be able to do our duty. We cannot properly scrutinise, because we are presented not with clear, defined policy and the detailed definition of how it will be put into effect but a series of thoughts on what is, clearly, an evolving policy. The Government are ruminating, thinking, considering the matter.

I welcome that. In many areas, I hope the Government will go on thinking, because, frankly, a lot of what they put in the Bill is not adequate and needs further thought,  but I wish they would have done that thinking before they presented a Bill to Parliament and asked us to scrutinise it. Frankly, it makes a mockery of the scrutiny process in Committee. We simply cannot wrestle with the detail because we do not know what it will be.

Photo of Greg Clark Greg Clark Minister of State (Department for Communities and Local Government) (Decentralisation and Cities) (also in the Department for Business, Innovation and Skills)

As ever, the right hon. Gentleman tries to have it both ways. In the previous debate, he castigated us for resisting his amendment, which he said would be a clear improvement to the Bill. In this case, we have received representations, including from Front-Bench and Back-Bench Opposition Members, as to the desirability of including neighbourhoods in a greater and more flexible way than the current legislation provides, but he criticises us for that as well. As I said when I gave evidence to the Committee, I take the process of scrutiny seriously. I believe that there is broad agreement on many of the principles of the proposal, but there is expertise in this Committee and the House, and we have an opportunity during the Bill’s progress through the House to make improvements as we can.

The right hon. Gentleman will know that CIL is available to local authorities. It is not required of them but is an option available to them, so the provision in no way places any burdens or obligations on them. The only question that we are addressing—it would be unreasonable to close our ears to representations—is whether we ought to make the provision more empowering, but what they have is there, and it holds. Determining whether we want to extend the flexibility seems a perfectly reasonable way to proceed.

Reflecting on the debates in Committee and considering that it is only two months since Second Reading, we have made substantial progress. Leaving aside the more knockabout exchanges, we have made improvements and commitments to improve the Bill. We have some way to go before the Bill completes its parliamentary stages. I made a commitment to the Committee when we took evidence that I would be reasonable in considering representations. If the right hon. Gentleman observes his own strictures and makes no further contributions on the basis that we are absolutely certain that the Bill will be amended in no other way, I am sure that my hon. Friend the Member for North Herefordshire—the Whip—will be delighted.

Mr Raynsford rose—

Photo of Nick Raynsford Nick Raynsford Labour, Greenwich and Woolwich

I could not let that stay on the record. The Minister mistakes two separate processes. He says that we have already made improvements; we have not—the Bill is exactly the same as it was when it was presented. The purpose of scrutiny in Committee is to improve the Bill, but the Government have resisted all our amendments.

Photo of Greg Clark Greg Clark Minister of State (Department for Communities and Local Government) (Decentralisation and Cities) (also in the Department for Business, Innovation and Skills)

The right hon. Gentleman is an experienced parliamentarian and was a Minister, so he knows how to interpret the commitments and undertakings that I have given to the Committee. Having taken Bills through Parliament, he knows that it is not in the experience of Committees directly to adopt particular amendments that are promoted without their being subject to the House’s due diligence and reflection. He does the Committee and me a disservice in not reflecting some of the commitments that I have made.

Photo of Nick Raynsford Nick Raynsford Labour, Greenwich and Woolwich

I do not, and I was going to observe that the Minister has given a series of commitments that we look forward to seeing delivered on Report. When we have pressed him for a timetable on some such commitments, however, he has been, shall we say, reluctant to confirm that we will see positive outcomes.

The crucial point is not that the Minister has not given commitments to give further consideration to concerns, but that the policy issue is not clear. On issues such as the community infrastructure levy, he will know that it matters fundamentally to local authorities whether provision for affordable housing is part of the CIL level that they set. If it is, they will set it at a different level from that which they would set if they knew that any provision for affordable housing should be handled separately under section 106. Although I take the Minister’s point that the CIL is there for local authorities to use, in effect, until there is greater clarity on that policy, they are in a difficult position. It would be foolish of them to set in place provisions that would have to be altered rapidly because of a change of Government policy on the CIL.

The Government should not be reconsidering policy in Committee. Yes, we should be considering the detail of how the policy is put into effect—that is the subject of debate in Committee, that is when we should be looking to improve the provisions in the Bill. The convention is that the Government come with legislation on policy that has already been defined, which is not the case here. We are dealing with a difficult situation—it is like wrestling with jelly, because on many issues the Minister has said, “We’re thinking about this; we might change the policy. We might do it this way; we might do it that way.” That is not how procedures should be handled in Committee.

Photo of Greg Clark Greg Clark Minister of State (Department for Communities and Local Government) (Decentralisation and Cities) (also in the Department for Business, Innovation and Skills)

Again, I fundamentally disagree. The right hon. Gentleman’s experience from his own Government was in stark contrast to this. They came to the House with Bills that were being written during their process through Parliament. The most recent Planning Act to be considered had more clauses inserted during its passage than it started out with.

It has been noted elsewhere, and all hon. Members would acknowledge, that proceedings have been remarkable, because although the Bill deals with a very ambitious and far-reaching set of reforms, a degree of common ground has been achieved in what seemed before to be unlikely areas of consensus. We have reached agreement on the shape of the future in a way that many people doubted when we started. When it comes to the particular issue of sale, I will only make the point that all we are talking about is extending the powers available to local authorities. At the moment they cannot take provision for affordable housing into account. I said I would reflect, in response to representations, on whether they should be allowed to in the future. That does not stop them publishing a charging schedule at the moment. It is entirely a consideration I am giving of a request to go further. That is in the spirit of the legislative process—if Parliament exists to scrutinise and improve legislation, it would be churlish not to consider representations that are made. Many organisations in civil society have spent much time considering the clauses of this Bill and making suggestions. The right hon. Member for Greenwich and Woolwich recommends that the Government turn a  deaf ear to any constructive suggestions made, but I do not think would be good for the reputation of the House.

Question put and agreed to.

Clause 95 accordingly ordered to stand part of the Bill.

Photo of Jack Dromey Jack Dromey Shadow Minister (Housing)

Being new, Mr Bayley, I will take your guidance. I wish to speak to schedule 9.

Photo of Hugh Bayley Hugh Bayley NATO Parliamentary Assembly UK Delegation

We will deal with that in a minute. I am sure we will have a lengthy debate on that later.

Photo of Heidi Alexander Heidi Alexander Labour, Lewisham East

Mr Bayley, may I take advice, too? I want to make some general comments about the introduction of neighbourhood plans, neighbourhood development orders and neighbourhood planning generally. Is this the appropriate time to do it?

Photo of Hugh Bayley Hugh Bayley NATO Parliamentary Assembly UK Delegation

I think it would make sense—as we are going to have a long debate about the schedule, which has all the meat in it—for you to catch my eye when we discuss the schedule.

Clause 96 ordered to stand part of the Bill.