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Examination of Witnesses

Growth and Infrastructure Bill – in a Public Bill Committee at 2:00 pm on 13th November 2012.

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Harry Cotterell, Liz Peace and Edward Cooke gave evidence.

Q 87

Photo of Philip Davies Philip Davies Conservative, Shipley

We will now hear oral evidence from the Country Land and Business Association, the British Property Federation, and the British Council of Shopping Centres. First, I ask our three witnesses briefly to introduce themselves.

Harry Cotterell: I am president of the Country Land and Business Association. We have 34,000 members, covering 250 different types of rural businesses.

Liz Peace: I am chief executive of the British Property Federation. We represent primarily the commercial property sector in the UK. That is shops, offices, industrial and a whole range of other things that now fall into the category of commercial property.

Edward Cooke: I am the director of policy and public affairs at the British Council of Shopping Centres. Our members are investors and developers, but also occupiers of shopping centres across the UK.

Photo of Philip Davies Philip Davies Conservative, Shipley

Before calling the first Member to ask a question, I remind all Members that questions should be limited to matters within the scope of the Bill and that we must stick rigidly to the timings in the programme motion that the Committee has agreed to. I hope that I will not have to interrupt anyone mid-flow or mid-sentence, but I will do so if I have to.

Q 2

Photo of Roberta Blackman-Woods Roberta Blackman-Woods Shadow Minister (Communities and Local Government)

Will the panel tell us whether they are broadly in support of the measures in the Bill, and will they quantify the benefits that they expect their members to derive from the Bill’s changes to the planning system?

Harry Cotterell: Broadly, we are very much in favour of the Bill. Our members are effectively small business men and women. I do not think there are any of them who do not want to grow their businesses. We are keen on the emphasis on growth.

We are very keen on the planning aspects, because planning is a business that virtually all our members get involved with at some stage in their lives, and it is almost impossible in rural areas to expand, grow or start up a new business without getting involved with planning. Therefore we welcome the moves that are planning-focused, although we would emphasise that  planning will not necessarily deliver growth without the economic boost and climate for our members to make business decisions that will expand their businesses.

Liz Peace: We have a somewhat ambivalent attitude towards the Bill. We are not against any part of it; we can see why it is valuable for development.

A number of my members are quite nervous about the provisions for an applicant to go over the head of a local authority, either to the Planning Inspectorate or to the Secretary of State, on the basis that my members’ developments require a long-term relationship with a local authority; generally, they want to go back to do something else in a couple of years’ time. They are nervous that if they take the fairly draconian action, their future relationship with that local authority would be severely damaged. Having said that, they do appreciate the need to try to take some of the excesses out of the planning system, because it certainly is a problem in a lot of places and with regard to a lot of individual developments.

My members have told me that they are happy with the Bill and to see it go forward. They would not expect to use it very often. They probably see its major value as being in deterrence—almost pour encourager les autres. Those are the planning provisions.

The one part of the Bill that my members are deeply concerned about is clause 22 and the rating revaluation, which has absolutely nothing to do with the rest of the Bill. I have no doubt that someone will want to come on to that specific one. That, we are wholly opposed to.

Edward Cooke: From BCSC’s perspective, on average it takes more than 10 years to deliver a shopping centre scheme, which is a significant amount of time, given all the economic and social benefits that are delivered through those investments in towns and cities. Any motivation to speed up that process should be encouraged. Therefore, the Bill, in terms of its aspirations, is to be welcomed.

As Liz has said, there are often bigger issues than planning to face when delivering such significant investments, not least loans from capital markets and financing development, especially in today’s climate. This is the first year since we have been collecting records—since 1983—that no new town-centre shopping centre scheme is being built.

On clause 22, we wholeheartedly oppose the Government’s intention to revalue in 2017 as opposed to 2015.

Q 3

Photo of Roberta Blackman-Woods Roberta Blackman-Woods Shadow Minister (Communities and Local Government)

Mr Cotterell, you mentioned particularly problems encountered by your members with the planning system. How widespread do you think the problems are with planning and, in particular, how many poor authorities do you think there are?

Harry Cotterell: It is difficult to say the problem is there, because we are waiting for the national planning policy framework to be bedded in effectively. A lot of local authorities have yet to come to terms with the realities of the NPPF, and we have to watch that process. We think that the NPPF will greatly improve the planning environment for small businesses in the rural areas and we are very much in favour of the presumption. We think that is good news.

The problems our members encounter most are the bureaucracy, and the size and scale, of the system. Predominantly, our members are small developers, and  often it is just a case of extensions to an existing business. Quite a lot of the measures in the Bill will ease that. We are very keen that applicants do not have to provide as much information. We think that will be a great improvement and encourage more people to bring developments forward. In terms of actual authorities, I cannot name which ones are particularly good or particularly bad, but there is plenty of information already in the public domain that gives you an indication.

Liz Peace: The information point is a very interesting one. While we are at that part of the Bill, it is great in principle—a pronouncement that there will be a requirement for less information is excellent—but how do you implement it? What sort of sanctions do you have? Someone standing up and declaring that motherhood is great? What we actually need is the follow-up on that.

We have been waiting for some time to see how the Department proposes to implement the 12-month planning guarantee and, indeed, the details of how you manage information requirements and limit some of the extent of, dare I say it, useless information and the padding that goes with planning applications. Planning applications for major schemes are delivered on forklift trucks these days, not in envelopes or through the post. That has got to be wrong. That has got to be susceptible to being controlled and reduced, but we would like to know a bit more about how you do it rather than just a fairly bald clause in a Bill.

Q 4

Photo of Roberta Blackman-Woods Roberta Blackman-Woods Shadow Minister (Communities and Local Government)

That is very interesting. Do you have actual evidence from your members about particular schemes being stopped or unduly delayed, or are you basing your comments on anecdotal information?

Liz Peace: Evidence from members is to some extent anecdotal because they come and tell you what has happened, how many referrals they have had to have to a planning committee and how much information they have had to deliver. If you just look at some of the major schemes over the last few years—King’s Cross, Nine Elms, Battersea—and at the complexity of what is actually being required, you have to ask yourself whether this is a good use of everybody’s time.

I often wonder who wades through these vast tomes of information. I assume that local authorities must hire consultants to do it. I do not believe anybody can grasp it all and form a view of its value and, therefore, get to the nub of the scheme. There are a lot of things driving this: Europe, to some extent, the threat of judicial review. We could cite many different examples from different companies.

Harry Cotterell: Our point would be that a lot of the information that is required is not really necessary for a very small development or small proposal. Secondly, a large number of local authorities in the rural areas charge for—or do not allow—pre-application consultations, so the first contact with the planning system is when the application goes in. Thirdly, the local authorities will use a photocopied list of documentation required, which is the same regardless.

The number of our members who live on the top of a hill who have said they have required flood risk assessments, which is plainly ridiculous but very rarely costs less than £1,000, is huge. All my evidence is anecdotal, but I have plenty of examples of ridiculous requests from local authorities for pre-application information, mainly relating  to flood risk assessment, environmental assessments and stuff that goes on in conservation areas, which is irrelevant on modern buildings but requires conservation-type assessments.

Q 5

Photo of James Morris James Morris Conservative, Halesowen and Rowley Regis

I want to ask about clause 21, which is about planning decisions being able to be, as it were, escalated up to the national infrastructure planning system. What is your reaction to that clause?

Liz Peace: Some years ago when the regime under, I think, the 2008 Act was being discussed, we argued strenuously that major town and country planning schemes—not the ones covered by the Infrastructure Planning Commission, which were covered by different legislation—and big development schemes ought to be allowed to go through the IPC regime. We were firmly batted down and told absolutely not—

Q 6

Photo of James Morris James Morris Conservative, Halesowen and Rowley Regis

Sorry to interrupt, but what do you think the threshold should be?

Liz Peace: I do not have a particular view in numerical terms, but, as an example, a development of the scale of something like King’s Cross would have been a sensible one to take through a major infrastructure projects regime. Frankly, we are now less convinced that that is the right route, until we can be absolutely sure that the IPC regime is indeed faster. The national policy statement relating to that piece of infrastructure is what facilitates its fast progress through the scheme. If you are talking about a big general development as opposed to a specific piece of infrastructure governed by the NPS, we are not absolutely convinced that this is now the right answer. It needs a further layer of thinking to make sure that there is a plan against which it can be rapidly judged.

There is also one particular, rather strange bit in the clause, which explicitly excludes projects that include

“the construction of one or more dwellings.”

That would take out most mixed-use schemes. These days, most big schemes are indeed mixed-use schemes: Battersea, King’s Cross, Elephant and Castle, and Liverpool One are all mixed-use schemes. There is an element of residential, so I am not absolutely sure what the logic is in that phrase.

Q 7

Edward Cooke: From my perspective, shopping centre investment delivers a huge amount of local infrastructure, which is of huge value to communities. In a large scheme, it can be tens of millions of pounds, so we want to find a way to ensure that that continues to be delivered as speedily as possible. We have talked for a long time about tax increment financing being used as a mechanism that might enable that to be private sector-led. However, the BCSC as an organisation is 100% supportive of town centres versus a concept articulated very clearly in the national planning policy framework. We would like to see that delivered more consistently across local authorities.

Q 8

Edward Cooke: It is a question of whether commercial development and in particular retail development should be considered within that. We have reservations because  our primary focus and support is with the “town centre first” planning policy within the NPPF, so we would want to ensure that that is protected.

Q 9

Photo of James Morris James Morris Conservative, Halesowen and Rowley Regis

Do you think this might be a contradiction?

Edward Cooke: Until I see the detail of what will and will not be included, it is difficult to know at this stage, but it could easily be.

Q 10

Photo of Nick Raynsford Nick Raynsford Labour, Greenwich and Woolwich

This morning, we heard Ministers saying that they were introducing clause 22 to give greater certainty to business and to save business from unacceptable costs. We have heard both the British Property Federation and the British Council of Shopping Centres say to us very clearly that you are wholly opposed to clause 22. Could you explain why you object?

Liz Peace: The current business rate bills are based on the 2010 revaluation, which was in turn carried out effectively in 2008, which means that places that have declined significantly since then were hoping for a degree of relief from the revaluation in 2015, for which of course the evidence would start to be taken next year. We understand entirely that business rates are a sort of closed loop system, a redistribution, but it seems to me that this is absolutely set in stone—the business rates for those places that have been least successful and that would have looked for relief. That is exactly what the Government have not wanted to do. They want to bring relief to places that are suffering.

Some of our members, Gerald Eve in particular, have done an assessment for us and suggested that retail in the north-east and north-west, offices across England—the north-west, the west midlands, the east and London—and industrial in the east will lose from this postponement. Parts of the economy are suffering, and it seems absolutely bizarre that you want to lock in their suffering for another couple of years. That is why we are fundamentally opposed to this. We accept that some areas that would have risen will not rise. Is that fair when their values have actually gone up and they might legitimately have been asked to pay larger rates?

Edward Cooke: The principle of the system is to redistribute liability so that those who have fared comparatively well pay a greater share of the rates bill. Those with the broadest shoulders are supposed to bear the greatest burden, and we think that the change to a 2017 list will have the opposite effect. We know from the Valuation Office Agency data—sketchy as it is—that the north-east and the north-west, from a retail perspective, will suffer most from the change in Government policy. They are the areas that need the most support. We appreciate the Government’s support for town and city centres—the work they have been doing with Mary Portas and others, including ourselves. We think this completely contradicts where the Government are coming from in that area.

We question the viability of the data that is being produced by the VOA. In its own words, the data is based on very limited market evidence—I am not sure of the size of the sample; it would be interesting to hear what that may have been—and it is not subject to the rigour of moderation or validation, so there are some big question marks over it and, therefore, the outcome  of its assumption that 800,000 assessments would be better off. It clumped 530 into this group of “other”, and then made a bunch of assumptions about whether the valuation would increase. Indeed, it assumed that it would be in line with bulk classes, for which the evidence is fairly woolly to say the least.

Q 11

Photo of Nick Raynsford Nick Raynsford Labour, Greenwich and Woolwich

May I ask you to take a slightly wider look? In contrast with business rates, which are subject to regular, five-yearly updating, council tax has proved politically impossible for any Government to revalue since 1991, so we are locked into a notional 1991 value. Do you see a potential risk that, if postponement of business rates becomes politically acceptable, there could be a move towards a similar trend, where it becomes impossible to make a revaluation?

Edward Cooke: I think that if the justification is to create certainty to business, then shifting the goalposts, as has been proposed, does quite the opposite.

Liz Peace: For a business, business rates are a significant cost. You would expect the cost to reflect economic circumstances. If they cease to reflect economic circumstances, that is going to be bad for businesses. Frankly, as an industry, we would prefer more frequent valuations. We actually think this five-year cycle is somewhat unfortunate, especially because you have this time lapse when it is actually done, but that is probably another subject.

Q 12

Photo of Nick Raynsford Nick Raynsford Labour, Greenwich and Woolwich

Finally, may I ask whether you feel that the transitional relief mechanism is the more appropriate means for dealing with short-term, adverse consequences of lifts in liability?

Edward Cooke: It does serve that purpose. Our thinking was that if we had had a revaluation in 2015, we would have started to question the justification for transitional relief because we would have wanted to see the benefit of reduced rates bills in the areas where businesses really need supports to kick in as soon as possible. We did not get to the stage of having that conversation properly because this was presented to us out of the blue.

Q 13

Photo of Andrew Stunell Andrew Stunell Liberal Democrat, Hazel Grove

May I go back to the point you made about developers not wanting to go to the Planning Inspectorate because of preserving their longer-term relationship with local authorities. Could you explore that for me a bit? The traditional thumbnail sketch, if I can put it that way, is that this is a very confrontational set of relationships. I was interested in your point about that.

Liz Peace: It is difficult to generalise about relationships. The members I represent tend to be public listed companies, big institutions and traditional family estates, who take their community responsibilities very seriously. They will tell you that they spend a lot of time, money and effort on consultation. They try, on the whole, or always, to do a development with the support of local communities. You have also to remember that with commercial property, it is quite likely that the people who are making the development will actually stay there and manage it, so they have a long, ongoing relationship with an area, which is another reason they put such a lot of effort into community consultation.

It can be deeply frustrating going through that process, and they would certainly, without any doubt, like it to be quicker and less costly. The old adage that time is money is entirely true, because of course you are paying interest charges on your debt during a long negotiation. But if you scratch most of them, or push them really hard on this, they would say that they have to balance very carefully the benefits of saving a year or so by going straight to PINS over the head of a local authority against the longer-term relationship.

Look at all your shopping centre members, all my major development members—they go back a few years later to do a second phase of the development. A local authority is not likely to be terribly sympathetic towards them if they have had an adversarial relationship, so their interest is in building as good a relationship as they can. It is not perfect, it never is, and they fall out over various aspects, but generally speaking I think that they would not necessarily see this measure as being massively helpful for them. They may be prepared to let other people do it rather than lead themselves. As I said, we do not oppose this. I am simply saying that I would be quite surprised if I saw a lot of my members in the commercial world taking advantage of it.

Q 14

Photo of Andrew Stunell Andrew Stunell Liberal Democrat, Hazel Grove

Can I take the other half of that? You said that if they could save a year, maybe there would be a trade-off. What level of saving would actually trigger that trade?

Liz Peace: I do not think you could generalise, because it would depend on the economic circumstances of the company. A lot of companies will of course have incurred a substantial amount of debt in buying sites, and they have to service their debt, so it is always a fairly finely-tuned decision as to whether you do the scheme at all—whether it meets your internal rates of return and is actually worthwhile for your investors, for your savers, for the pensioners who depend on you. I suspect that companies would push very hard not to be driven into the position of ultimate confrontation that this offers. The hope would be that it would be a deterrent, or an encouragement to local authorities to be reasonable.

The best example, indeed it is one cited by Ministers in the Department for Communities and Local Government, is how Land Securities has managed to reach a compromise with the authorities around the whole affordable housing component of the development down at Kent Thameside in Ebbsfleet. That can be achieved by negotiation—they have done it through negotiation, and they would infinitely prefer to do it that way.

Q 15

Photo of Nicholas Dakin Nicholas Dakin Opposition Whip (Commons)

To return to clause 22, the Bill is titled Growth and Infrastructure, but you seem to be saying that the clause will have the opposite effect in those areas of the country that had expectations of, to use your phrase, “relief” from 2015. Am I picking that up correctly?

Liz Peace: Absolutely right. Both Edward and I have been very focused on the retail sector over the past year because we have been heavily involved in the Portas review and discussions with the Department for Communities and Local Government about how to implement it. If you look at retail vacancy rates in some of the northern towns, they are as high as 30% or 33%.  These are places that are struggling, and business rates are a big component of business costs. If places feel that they were going to get some relief and they are now not going to get it, that is not really going to help them. It could be the thing that drives them into bankruptcy.

Q 16

Photo of Nicholas Dakin Nicholas Dakin Opposition Whip (Commons)

What you are saying is that this will quicken the decline of the high street in those parts of the country.

Liz Peace: Yes.

Q 17

Photo of Nicholas Dakin Nicholas Dakin Opposition Whip (Commons)

You also said that it will impact badly on manufacturing in those areas of the country as well.

Liz Peace: Certainly what we have done through the good offices of one of our members, Gerald Eve, whose staff are experts in rating data and have submitted a substantial amount of evidence directly to your Committee, is assess who the winners and losers would be. If it is not actually in the letter sent to you, I am sure that Gerald Eve would be happy to give you further details. As I said, it has concluded that office property would also suffer badly across the whole of England under the all-England figures. It is particularly picked out in the north-west, the west, the west midlands, the east and London, which covers most of the country. It is certainly fixed on industrial in some areas, but that is not a universal picture.

Q 18

Photo of Nicholas Dakin Nicholas Dakin Opposition Whip (Commons)

Earlier, Ministers were saying that there were more winners than losers by the delay, but you do not agree with that.

Liz Peace: We do not believe that, frankly.

Edward Cooke: One point on the costs conversation is that business rates are often presented as a cost to retailers, and evidently it is the occupier that pays the business rate, but the incidence of the tax does not always fall on the occupier. That is an important point in the context of town and city centre investment. It is often the investor or the landlord who ends up either indirectly footing the bill through reduced rent or directly contributing—increasingly so—to the rates bills of that retailer. In any development appraisal or investment appraisal, business rates are increasingly taking up a larger and larger proportion of the overall costs of occupancy. That is having a negative effect on investors’ ability to make those investments in towns and cities. It is not just a retail issue.

On the point about the data, we feel—we are collecting our own evidence at the moment—that to assume that 800,000 hereditaments would be winners, when you are looking at 530,000 within the other category in the VOA’s assessment, is not a sufficiently detailed analysis on which to make that assumption. Page 8 of the VOA’s estimates tells us that in those 530,000, it is including assets such as stables, police stations and cinemas. Those are all categorised together and the same assessment as for the bulk classes is applied. They are very different things. They are very different asset classes and have performed very differently over the past three or four years. The level of detail in the data that have been produced is not sufficient in our mind to say that 800,000 business or hereditaments would benefit.

Q 19

Photo of Nicholas Dakin Nicholas Dakin Opposition Whip (Commons)

If you were writing a clause 22 on business rates for this, taking the opportunity of the Growth and Infrastructure Bill, what would you put in it?

Liz Peace: We would just take the clause out completely.

Edward Cooke: Yes. Take the clause out in the context that if you wanted to have a clause in the Bill on how to use business rates to incentivise growth, it would have to reduce overall costs to incentivise demand, which business rates are not doing currently. That is probably one step too far.

Q 20

Photo of Bob Blackman Bob Blackman Conservative, Harrow East

We have heard evidence about the fall-off in the approval rates of major planning applications, particularly within the time scales that are required. I wonder whether there are particular parts of the country or particular planning authorities where your members have had a bad experience? What view would your members take on the clauses in the Bill?

Harry Cotterell: I am nervous at pointing the finger in any particular direction, but anything that can focus on the quality of planning in local authorities will be a good thing, because users of the system have found that, apart from the bureaucracy and cost, it has in quality terms diminished over the years. That is for a number of reasons, not least of which is the lack of resources. Going forward, anything that can improve the quality of planning delivery in local authorities is to be welcomed. That is why we do not have as much of a problem as the other two organisations do with the proposal where you can go directly to the Planning Inspectorate. Although our members would virtually never use it, because the scale of their developments is so small, we think that were the sanction available, it might improve the quality of planning departments. I really do not want to get into the geographical bit.

Q 21

Photo of Bob Blackman Bob Blackman Conservative, Harrow East

I understand that. Is it smaller planning departments that you have problems with, or is it larger authorities where there may be more planning officers? Is there something in there that is of concern?

Harry Cotterell: The difficulty is that there are so many problems. There is cost, bureaucracy and the speed of application. When a small business man is confronted by all of those, he is tempted not to apply. I always think that the figures that are used to demonstrate the number of applications that actually achieve planning are a complete distortion of the success and competence of the planning system, because our members do not actually get to apply. They take a look at the system; they may have a pre-application discussion with a planning officer, where that is available; they are confronted by a massive barrage of requirements, reports and whatever for probably a relatively modest development; and they say, “Actually, I don’t think I’ll do it.” That is the key for small, rural business men, and I think that that is fair to say. The numbers that are in the public domain add up, but rural planning authorities probably do not achieve as well as metropolitan or urban ones.

Liz Peace: Our members tell me that those parts of the country that are striving for growth tend, on the whole, to pass planning applications more quickly. Somebody told me in great glee today that they had just got a major planning application through for a very large shed—I think it was in Warrington—in five weeks, so it can be done: the local authority wanted it to happen, and it was part of its growth plan.

The slight worry is that a lot of local authorities—I try to meet as many as possible—tell me that they are open for business and that they have a good record of  dealing with planning applications, and ask whether I could please get my members to go there. Regrettably, some of them tend to be in parts of the country where it is quite difficult to get the membership to go. I wish I could, because those places are extremely positive about attracting industry and commerce.

Part of my problem with the Bill is that I am not altogether sure that it addresses the right things. Planning has been an issue for as long as I have worked for the industry, which is more than 10 years now. My members rail against the complexity, the amount of information and the length of time it takes. CLG and the planning department within it have been trying very hard to address a lot of the issues. I think the national planning policy framework is excellent, and that the presumption is excellent, but it is now coming to the next stage—how do you roll it out to make it really happen on the ground?

We are great proponents of planning performance agreements. We do not necessarily think that to complete a complex planning application in 13 weeks is realistic anyway. Actually, what my members want would be a sensible project plan for a period in which that could be achieved. If that is going to be 23 weeks, that is fine, but at least have an agreement between the applicant and the local planning authority about the timetable.

Q 22

Photo of Bob Blackman Bob Blackman Conservative, Harrow East

Do you have examples of where planning authorities have obstructed such sensible agreements?

Liz Peace: Planning performance agreements have not been adopted as universally as we would have hoped. I do not know why. We are a small organisation, and I cannot get out and around the country as much as I would like. I suspect that there is a fear in planning departments, and certainly in planning committees, that they do not want to be tied too firmly into a timetable. I think a lot of people—planning councillors and development management committee members—tend to think that planning is something that is open-ended and needs to take as long as it takes. Coming from an industry background, that would not be my view. I think planning should be treated as a project like anything else: you should set a time scale and you should stick to it.

If the Department could look at ways of putting a bit more oomph behind planning performance agreements—perhaps call them something a bit sexier as well, to make it sound as though they are more of a contract, rather than an optional agreement that both sides can opt out of if they want to—that might be quite helpful.

Q 23

Photo of Bob Blackman Bob Blackman Conservative, Harrow East

Mr Cooke, I think you said earlier that it took 10 years to get a major development. Are we suddenly going to see planning authorities overridden by your members, saying, “It’s a waste of time doing the planning process. Let’s just go straight to the national position and try to short-circuit those 10 years to possibly a year. Who knows?”?

Edward Cooke: That would be impressive. Very much as Liz articulated earlier, our members are committed to working with communities to deliver the schemes that they deliver, and that includes local authorities. They need to be onboard to help them to promote them, and very often they are significant partners in a  development, not least through land ownership. In the first instance, it is to try to work collaboratively with all those crucial partners in a local place. As a fall-back position, it may have some merits.

As I said earlier, for us the key thing—Liz has just mentioned it—is local authorities planning positively and proactively for retail development in their town and city centres, which is not happening in the way that we would like, and finding ways to fund the schemes, which is a macro-economic issue. Also, we believe that Government policy in relation to tax increment financing may still have a role to play in that. Planning is a barrier that has to be overcome. I think that you have to be quite smart in the way that you overcome it, and going directly to another level is not necessarily the right approach.

One final thing to say is that there was both a concern about and a really positive aspect to localism. The concern is about the devolution of power to local planning authorities in the way that it is being rolled out, without the skills and resources within those local planning authorities. Naturally, that is a concern, especially for retail development, where there might be one significant scheme in a generation coming to your place. However, the positive aspect is that the officers working within those planning authorities suddenly have much more responsibility; they are empowered. They are doing much more than just ticking boxes and ultimately that should have positive outcomes. What I suppose we do not want to try to do is to find a way of circumventing the new system before it has really bedded in properly.

Liz Peace: I would just like to add one other point. So far, I have managed to avoid mentioning the community infrastructure levy. A few months ago, if you had prodded any of my organisation’s members, the thing that was worrying them most—more than is taken account of here in the affordable housing requirement—was the fear of the way that the community infrastructure levy was going. I have to say that the Department has now reacted extremely positively to our concerns, and Mr Boles and his staff have been looking at ways in which we can make the levy better.

One of the interesting things about the community infrastructure levy was that there was no right of appeal. Once you were fixed with a community infrastructure levy, you were stuck with it and the local authority could not grant any exemptions either. That was a rather interesting juxtaposition with what is being offered here and now, which is an appeal over the heads of local authorities.

However, I want to make the point that the community infrastructure levy is currently being addressed and we are very hopeful that the Department will come up with some sensible reforms to it. I think that that is almost more important than some of the material that is in the Bill.

Q 24

Photo of Bob Blackman Bob Blackman Conservative, Harrow East

How much of a barrier is the current position on broadband to getting developments delivered?

Harry Cotterell: In rural areas, it is huge. You will never get an office rented if you do not have broadband. It is probably the biggest infrastructure issue in rural areas for conversion—that, and business rates on empty property, which is stopping speculative development. Those two things are probably the two biggest barriers to starting those kind of schemes.

Photo of Ian Murray Ian Murray Shadow Minister (Business, Innovation and Skills)

My question was about broadband, Chair, and it has been asked.

Q 25

Photo of Andrew Stunell Andrew Stunell Liberal Democrat, Hazel Grove

Can I just pick up on the proposals in the Bill about changes to section 106 agreements? It might be particularly relevant to rural areas, and Mr Cotterell might want to express a view about that issue in relation to mixed developments and so on. What is your approach to the proposals in the Bill, and do you have any comment on the direction of travel here?

Harry Cotterell: It is quite difficult, because we do not have a long list of members who have developments in the pipeline that are being held back by the 106 requirements, particularly the requirements on affordable housing. Anything I say is therefore based on the fact that I suspect high levels of affordable content in developments for 106 requirements in local authority areas are probably more of a barrier to thinking about a project rather than to starting a development—does that make sense? As I say, we do not have a long list of them, just because our members are hopefully not often above the threshold, but if the threshold is too high a proportion they just will not start the project. They will not even go to planning.

Q 26

Photo of Andrew Stunell Andrew Stunell Liberal Democrat, Hazel Grove

And in relation to our urban friends?

Liz Peace: Section 106s can be an issue. I can think of one particular example, which I would rather not name, where a section 106 was negotiated in rather happier economic times; it is a large section 106. It is now deemed by the developer to be unaffordable. The local authority in that particular case had promised the town that they would get a whole load of town improvements out of this section 106 and are reluctant to renegotiate it. There appears to be an element of stalemate. That is not specifically about affordable housing; section 106 can cover lots of things.

There are already mechanisms by which section 106 can be renegotiated. In the example that I cited earlier, it has happened, and my members would much prefer to do it by that route. I suspect that the provision may be more useful for volume house builders, whom I do not represent and from whom you are taking evidence separately. I would not want to scupper the clause on the basis that it is probably more useful to them than to my members. However, again, it has a deterrent effect. If it brings local authorities to the negotiating table, where both parties can have a grown-up negotiation about what exactly is feasible in new economic conditions, it will have served a useful purpose.

Edward Cooke: I do not have huge amounts to add, other than that planning obligations can be a barrier to getting schemes away from a liability perspective. Sensible local authorities are engaging commercial developers to revisit those historical obligations. That is the right way to take this forward.

Liz Peace: It is also undoubtedly the case that given the way the community infrastructure levy was going, we said that that was turning out to be an added burden on top of section 106. That would have been a big problem, but, as I have said, I am hopeful that the Minister has taken steps to address that.

Q 27

Photo of James Morris James Morris Conservative, Halesowen and Rowley Regis

On clause 1, we have talked about planning departments. What are your views on the criteria that will be used to judge whether a planning department is performing appropriately, other than time? Are there any other criteria that you would suggest?

Liz Peace: I have always been cautious about trying to set criteria for performance, because they are subject to manipulation and sometimes drive unhelpful behaviours.

Q 28

Photo of James Morris James Morris Conservative, Halesowen and Rowley Regis

Are you suggesting that it is not possible to come up with criteria, or that it would not be helpful to do so?

Liz Peace: I think you have to take a much broader approach, which is why I think special to-purpose targets for individual developments are a much better idea than sort of blanket targets.

Regarding the business of 13 weeks, we have plenty of evidence, from the days particularly when planning performance grants were tied in with that, of local authorities manipulating that number, insisting that applications be withdrawn so that they did not have to show that they had run over the time. That is what worries me about setting slightly injudicious targets for performance. I think you have to be very careful. What you would need to look at is performance against the plan and against particular special to-purpose time scales for individual developments, rather than the sort of blanket “must do x per cent by 13 weeks”. To be honest, I have not worked through possible alternatives; I just urge caution on setting performance targets.

Q 29

Edward Cooke: No.

Harry Cotterell: No.

Q 30

Photo of Roberta Blackman-Woods Roberta Blackman-Woods Shadow Minister (Communities and Local Government)

That was an interesting set of comments. I want to tease more out of what you said. Earlier, you said that the greatest benefit of the Bill might be that it will act as a deterrent. I want to know what you think is being deterred, if it is just a bit of tardiness in terms of decision making, whether it is something to be lost by an approach that concentrates just on speed rather than looking at the complexity of factors that can arise locally when an application is being determined.

Liz Peace: I certainly do not believe that it is always about speed, which is why I think that setting a target of a number of weeks is inappropriate. You absolutely could not deal in 13 weeks with the sort of developments a lot of my members undertake. The five-week shed in Warrington was a particular case but, come on, sheds are sheds. If you are doing a complex shopping centre development or a complex mixed use development, you are not going to deal with it in 10, 12,13 or 15 weeks.

What both our members, if I could cross over between them, would like to know is how long it will take and what reasonable period they have to expect. Coming back to the national planning policy framework, tied in is the requirement for a local authority to have a very clear plan. What I have always said to my members is that, if you then put in planning applications that are contrary to a plan and you get a bloody nose, that serves you right for trying it on. You have to have a properly constituted plan for an area that reflects growth against which developers, my members, can come along saying, “Right, you are prepared to accept this sort of development here. Here’s my application for it. Now,  let’s have a sensible debate about how long it would take to get it through.” That is my ideal world. I do not see why we should not strive for that situation.

Q 31

Photo of Roberta Blackman-Woods Roberta Blackman-Woods Shadow Minister (Communities and Local Government)

That is an argument for certainty rather than speed. Is it one that Mr Cotterell shares?

Harry Cotterell: The difficulty from our point of view is that the majority of our developments are very small scale. These guys were much, much bigger and so we are chalk and cheese on that front. One of the things that we have welcomed recently is the arrival of new permitted development lights for non-contentious conversion of agricultural buildings, which is a recognition that quite a lot of the development that a lot of our members are involved with is virtually of no significance to the wider population, beyond what is going on in a farmyard or whatever. The Government have recognised that, and that is good. Hopefully, it will reduce some of the number of applications that are going in from our members to planning authorities.

Going forward, on the quality of decision making, we need speed or at least we need a good pre-application process. It is difficult to tie in people to, “Yes, there is a good chance that we are going to get this. It is worth going forward” on an informal basis before they start spending serious amounts of money on the application. That pre-application process would be a great help to our members.

Liz Peace: I would not disagree with anything Harry has said, but he is talking about a different sort of applicant. One of the points we have always made is that, if you actually want to increase the availability of resource within planning departments—and resource is a huge issue—you should take a lot of the minor stuff out of it or get it dealt with by planning technicians rather than by fully qualified planning officers. Find ways of freeing up the resource to deal with the big things that are taking a lot of time.

Pre-application discussions are potentially hugely useful, but you have to look at the planning process as a whole, including the pre-application discussions. What we have seen in the past are local authorities that will not actually—I forget the formal term—log or lodge a planning application until you have spent an awfully long time on the pre-application discussions so that they can then meet the fixed target. You cannot measure the process like that; you have to look at the whole thing from beginning to end. We are greatly in favour of pre-application discussions but, as I say, you have to consider this as one whole process and the point at which you get the planning application validated is just one point on that path.

Q 32

Photo of Nick Raynsford Nick Raynsford Labour, Greenwich and Woolwich

I want to pick up again on the very interesting points about the difficulty of constructing any list of authorities that have either been tardy or else haven’t performed well in processing applications. We have been very conscious of the various lists that have appeared of authorities that are failing on one or other of the indicators. They have produced some rather odd outcomes with rather unexpected authorities like Torbay, and Kensington and Chelsea appearing to be very slow. Authorities like Manchester, which is seen as generally a very pro-development authority is appearing to have  a high proportion of applications overturned on appeal. Therefore, the worry that one has is that any list that is produced is likely to be perverse in that it may include some authorities that are pro-development and not by any means hostile, but equally it might exclude some that are not performing very well. The latter will breathe a sigh of relief and feel that they are off the hook. This is an important point. If we proceed with legislation—Ministers have told us that they are going to construct this list based on objective criteria—are we going to create a monster that will have perverse and unsatisfactory outcomes?

Edward Cooke: We certainly agree that there is such a risk of creating those perverse outcomes and that those criteria will need to be sense-checked very carefully by people who use the systems, such as our members. We would obviously very much afford the opportunity to engage in that process. Our members, the people who operate in these places, are well aware of who is good and who is bad. If you create a list, however, as we have already discussed, that does not assume that our members will go to that list and think, “Great, we don’t need to go through the due process.” Their starting point, I am sure, will be to go through the due process with the knowledge that there is this list that has been created.

Liz Peace: It is very difficult to wind back the clock and wish that planning was a less complicated process than it is now. We all share that sentiment, but it is difficult to see how you would do it. You also have to bear it in mind in constructing this list that lots of nasty things can come from left field that you are not necessarily expecting. I can cite a particular example. It was not so much a planning application as the preparation of a plan by a group of local authorities—three quite small ones—that were doing exactly what the Government wanted them to do: they were co-operating together. They had come up with an excellent plan for umpteen thousand houses in one particular area and they were completely derailed by a small pressure group that managed to get permission for judicial review. The whole thing was pushed a year to the right, but those local authorities were doing exactly what the national planning policy framework and Government policy required them to do.

Heritage issues similarly derail planning applications and can come in suddenly from left field. Other statutory undertakings such as transport are, generally speaking, a real problem for the members. Some aspects of the Penfold review looked at the other statutory undertakings that have a handle on determining planning applications and considered how that part of the process could be accelerated. We think that that is a hugely profitable area for CLG to look at—not just CLG, of course; they have to do this with the Department for Transport. If you could deal with some of the problems there, that would be hugely helpful. Frankly, I think you are on a hiding to nothing to construct a list of performing and non-performing authorities. It is too complex and you will drive the wrong behaviours.

Q 33

Photo of Therese Coffey Therese Coffey Conservative, Suffolk Coastal

Ms Peace, would you clarify why a judicial review was granted? It is usually on the grounds of process. I am a bit confused, because you say they are doing all the right things.

Liz Peace: I suspect you may be a lawyer, and I am not.

Liz Peace: It seems to me that for judicial review, if you are determined, an opponent can usually find some aspect of an incredibly complex process that has not been followed correctly. This is a subject matter that we as an organisation have been looking at in conjunction with officers at CLG. We have said how can we try to at least deal with judicial review more quickly. You cannot constrain a process that is about individual rights. I am pretty sure you could always find some part of the process that was not followed to the absolute letter. That is what I was told in this case.

Q 34

Photo of Therese Coffey Therese Coffey Conservative, Suffolk Coastal

I am just interested in why you brought that up as an example when, frankly, the Bill does not necessarily change any of that. That is why I am a bit confused.

Liz Peace: The point I was trying to make was that all manner of things can come from all over the place to derail what ought to be a relatively straightforward process, and they do.

Photo of Philip Davies Philip Davies Conservative, Shipley

Nic Dakin has a quick question that he might want to get a quick answer to before time runs out.

Q 35

Photo of Nicholas Dakin Nicholas Dakin Opposition Whip (Commons)

You seem to be warning us about the risks of trying to find criteria to measure a failing planning authority. The more I listen, the more you seem to be saying that numerical targets are very risky. Perhaps the criteria should be based on standards, which are a bit more complex. If you are going to have criteria, they should be on standards of behaviour, of ethos, of attitude.

Liz Peace: The first way to judge a local authority is on whether they have produced a plan that has been through the due process and been passed. As of the time we were arguing the NPPF, something like 50% of local authorities had not. If we want to start with targets of any sort, that would be the best place to start.

Photo of Philip Davies Philip Davies Conservative, Shipley

If no one has further questions, we will move on to the next panel of witnesses. Time is up anyway. On behalf of the Committee, I thank the three witnesses. We will now hear oral evidence from the Chartered Institute of Housing, the Home Builders Federation, and the National Housing Federation.