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With this it will be convenient to discuss the following:
‘subject to criteria set out in regulations’.
Amendment 30, in clause 2, page 3, line 33, after ‘direct,’, insert
‘subject to criteria set out in regulations’.
Amendment 31, in clause 2, page 3, line 36, after ‘directs,’, insert
‘subject to criteria set out in regulations’.
Amendment 25, in clause 2, page 4, line 2, after ‘State’, insert
‘subject to mitigating circumstances, to include circumstances beyond the control of the holder of the inquiry or hearing’.
Amendment 32, in clause 2, page 4, line 9, after ‘direct,’, insert
‘subject to criteria set out in regulations’.
Amendment 33, in clause 2, page 4, line 12, after ‘directs,’, insert
‘subject to criteria set out in regulations’.
Amendment 26, in clause 2, page 5, line 2, leave out ‘if he thinks fit’ and insert
‘with the agreement of both parties’.
Amendment 27, in clause 2, page 5, line 5, at end insert—
‘(12) The Secretary of State must publish—
(a) the criteria that are to be applied by the Secretary of State in deciding whether sub-paragraph (11) should be employed; and
(b) the reasons of the Secretary of State for directing that “anything” be done under sub-paragraph (11).’.
It is a pleasure to serve under your chairmanship again, Mr Howarth.
With this group of amendments, we seek to ensure that when the Secretary of State awards costs he does so in keeping with the principles of good consultation and in a way that is beneficial to the planning process. Ensuring that all parties to an appeal act reasonably is essential, but the clause risks overly penalising local authorities and working against localism. If the risk of being designated as “failing” is not a strong enough deterrent for local authorities to turn down inappropriate development, the risk that they might have to pay the cost of appeals certainly will be.
That point, as the Minister knows, has caused great concern among Members. Indeed, the Minister’s hon. Friend the Member for Totnes (Dr Wollaston), said in the House:
“Does the Minister share my concern that councillors are sometimes put off from declining planning permission because of the fear of bearing the full cost of an appeal? Does he agree that that is sometimes acting as a barrier to localism?”—[Official Report, 12 November 2012; Vol. 553, c. 21.]
There are, therefore, already some worries about the clause.
Clearly, concerns exist that the costs of appeal are inhibiting true localism, in which case how can increasing the number of instances in which a local authority would have to pay the other party’s costs be beneficial, especially given shrinking budgets and the huge resources that developers often have at their disposal to undertake appeals? When local authorities consider the risk of having appeal costs awarded against them, alongside the risk that any decision overturned at appeal may contribute to their designation as “failing”, it is, in the words of the chief executive of the Campaign to Protect Rural England,
“obviously making it much more likely that developments, whether good or bad, will be nodded through by a local authority.”––[Official Report, Growth and Infrastructure Public Bill Committee, 20 November 2012; c. 143, Q327.]
The issue was raised to some extent in clause 1, and perhaps the Minister will give further reassurances this morning to guide the Committee as to how local authorities will be able to maintain the primacy of taking decisions in line with their local plan and not because of huge concern about costs that might be awarded against them.
At present, costs are awarded in very few instances. The impact assessment sets out that last year costs were awarded in only 3.7% of cases, but it goes on to predict that under clause 2 the number of cases could rocket, with costs being awarded in as many as 20% or more of all appeal decisions. Worryingly, the Minister’s Department has made no estimate of the amount that would cost local authorities, or any other party. Hence the need for amendments to allow for clear criteria and proper regulation of the procedure.
I shall take the amendments in a slightly odd order, rather than the order in which they are listed on the selection paper. Amendments 28 to 33 specifically target the need for proper criteria to be used when assessing whether costs should be awarded. The impact assessment states that
“this measure will lead to an increase in the number of costs awarded at least in the short term until longer term behaviour changes.”
However, there is no assessment of how long that might take. Unless the Minister hopes that the change in behaviour will mean that local authorities say yes to everything to avoid appeal, published criteria, set out in regulations, would surely speed up the change in behaviour more effectively. Such criteria would allow the Secretary of State to define what would be deemed unreasonable behaviour and therefore encourage—rightly—local authorities to avoid it.
My hon. Friend sets out her case very clearly. I hope the Ministers are listening carefully. Does she believe that the proposals in her amendments will give greater transparency and certainty to local communities about how matters might progress?
My hon. Friend makes an important point. Although I have been stressing the impact of the clause on local authorities, because it is they who are likely to have costs awarded against them, we ought to bear it in mind that local communities have a huge stake in the process because of the council tax they pay. They will be very concerned that local authorities might be constrained from representing their true interests because of the threat of having huge costs awarded against them. It certainly appears to me to be yet another anti-localist provision in the Bill.
There is no benefit in giving the Secretary of State discretionary powers to award costs in the hope that it will change behaviour, unless the instances in which costs are to be awarded are plainly set out. Furthermore, as the clause will allow the Secretary of State to award a portion of costs, he will need clear guidance in setting out the formula on which the portion of costs is to be awarded and, perhaps more importantly, how it is to be calculated.
Amendment 26 is key to the whole argument that we are making against the clause. Proposed new sub-paragraph (11) allows the Secretary of State to subsume to himself personally any power in connection to the award of an appeal. Can the Minister explain why the Secretary of State would require individual power to award costs independent of the experts appointed to decide such an award? The amendment seeks to ensure that such power would only be seized when it was to the benefit of all involved. It is difficult to conceive of a set of circumstances in which that might be the case. Nevertheless, it is important that some restraints are put on the Secretary of State’s powers under the sub-paragraph. We need to ensure that the Secretary of State is able to take such power unto himself only if parties to the appeal agree that that is appropriate in the circumstances.
Amendment 27 further constrains the unprecedented power given to the Secretary of State under proposed sub-paragraph (11). It seeks to ensure that the Secretary of State will make any decision under the sub-paragraph in accordance with published criteria. In previous sittings we heard assurances from the Minister that the Secretary of State does not make his decisions on a whim, and I am sure we are all relieved to hear that. However, some local authorities may still struggle to divine his reasoning. Published criteria would be extremely useful to assist them in trying to determine what is in the Secretary of State’s mind.
What my hon. Friend has said about the amendments brings to mind the overwhelming evidence brought to us in favour of localism, but also the great concerns about the centrist tendencies of this legislation. Does she believe that the arguments in her amendments will assist in meeting the concerns expressed in those representations?
Again, my hon. Friend makes a good point. Local people and councillors, who will have these costs awarded against them, need a better understanding of what will lead the Secretary of State to exercise these quite extraordinary powers and, if he decides to do so, what informs his decision making because, from the information before us, that is not at all clear.
I hope that the Secretary of State will ask for criteria to be given to him to help him reach a decision under the clause—not that it is exactly my role to make his job easier, but it may help all of us to understand what would be going on in those circumstances. If the Secretary of State has criteria to help him make a decision in an open, transparent and fair way, it should be relatively simple for him to share the criteria publicly.
I am grateful to my hon. Friend. For the second week in a row, she is dissecting clauses with great aplomb. The planning system is all about certainty and transparency, and the best way to create that would be to put in place a set of rules and a framework that people can work from so that they know exactly what is happening with a planning application. Indeed, if there were criteria in place, as proposed in the amendments, people would know exactly when the rules and framework would come into effect.
My hon. Friend makes an excellent point, which goes to the root of the amendments. The clause gives extraordinary and unprecedented powers to the Secretary of State in terms of awarding costs, particularly, I suspect, against local authorities. We need, therefore, to be clear about what will inform his decisions, how he will go about making them and what criteria he will use. It would also be useful to know what the time scales will be.
We want the Secretary of State to publish criteria that can be assessed to see whether he is making a fair and even-handed decision about the award of costs, and we want a requirement for him to publish his reasons for his decisions. Not only do we want open and transparent criteria that will inform decisions, we want them to be published. We also want to know, in particular circumstances, how they are being applied. We want the Secretary of State to publish his reasons; we do not think that it should be the role of local authorities, the other agencies involved or, indeed, Parliament itself to try to work out what the reasons might have been in any particular set of circumstances; we want it to be clear and transparent, and we would have thought that is something the Government would wish to do.
We have already seen that the Secretary of State has, some would say unfairly, allocated cuts across local authorities, with councils in northern urban areas and London boroughs—with high levels of deprivation and predominantly run by Labour—seeing their budgets cut by almost 10 times the amount lost by most Tory-administered authorities in southern areas of England during the Government’s first spending round. I raise that issue because it is adding to the fears in the local government community that the award of costs may fall in an equally inegalitarian way. That is why we are pressing the point so strongly: if the Minister and the Secretary of State want to ensure that they are not open to challenges similar to those that cuts are being made unfairly, they should set out clear criteria to make the process of decision making transparent.
My hon. Friend makes a good point about the impact of the opaqueness of the clause; together with the challenges faced by planning departments, it could lead to inconsistency across the country. I was struck by the written evidence on the clause from RenewableUK:
“We suggest that any award of costs regimes are transparent and able to be applied consistently across the board.”
Consistency is a key element, as well as transparency and openness.
My hon. Friend makes a very good point indeed, and I will be interested to hear the Minister’s response to it; the whole point of having published criteria and, in particular, publishing the reasons for a decision about award of costs made by the Secretary of State is so that we, along with everyone else, can assess clearly whether decisions relating to similar circumstances have the same broad outcome. My point is that lots of people in local government are concerned that that might not be the case, given the way in which cuts have been allocated so unevenly and so unfairly across local government.
Lastly, amendment 25 addresses a different problem: the circumstances under which the Secretary of State may have costs awarded to him for an inquiry that was not held. It is entirely reasonable that the Secretary of State may ask for costs to be awarded when an appeal does not take place as a result of another party’s doing. However, it is equally unreasonable that any costs should be awarded for reasons beyond the control of the party being pursued for costs. I am sure we can all agree on circumstances that would mitigate a claim for costs; those circumstances should be clearly set out on the face of the Bill.
The explanatory notes state merely that the measure will allow for costs to be recovered where, for instance, a hearing or inquiry is “cancelled at short notice.” However, there is clearly a significant difference between the cancellation of an inquiry due to flooding, for example, and cancellation due to ill preparation. The events of yesterday bring the example of flooding very much to our minds: in my Durham constituency, most of the major roads into the city centre were closed and people had to be sent home early from work. Much as I would like to discuss the problems of flooding and how to alleviate them in Durham and elsewhere, I am sure that I will be ruled out of order, so I will not go there.
My point is that it would have been extremely difficult for anyone to have got to an inquiry had it been held in the town hall or the offices of the county council. We are just checking that there is a degree of reasonableness, and we want to ensure that it will be applied. The amendment asks for that to be spelt out, so that it is clear what sort of mitigating circumstances may be taken into account in trying to decide whether costs should be awarded if an inquiry is not held.
Given that the Bill will take powers away from local authorities and hand them to the Secretary of State, has the Minister considered whether the Secretary of State, or any person he appoints, may also be liable to pay costs? Again, I want a bit of clarity, which we need, on the clause and this group of amendments.
It is pleasure to serve under your chairmanship again, Mr Howarth. I thank the Committee for the work done last week on clause 1. Our progress was somewhat deliberate, but constructive, and, since you were not there, Mr Howarth, and some members of the Committee were unable to be there for the entirety of our proceedings, it is worth acknowledging two points.
First, I am grateful to the Committee for helping me understand how important it is going to be for the inspectorate to hold hearings locally if contentious decisions come before it because a local authority has been designated, and that it will need to look at the possibility of those hearings in a slightly more generous light than it would on appeal. We have taken that point away, and I will take it up with the inspectorate, so the Committee has been very constructive there.
Secondly, although I was not able to persuade all members of the Committee that clause 1 is genuinely intended as a deterrent, it would, in fact, apply to very few authorities. Indeed, I hope it would apply to no authorities, should they improve their performance. Those were two important steps that we took, and I hope that we will have as constructive a day today.
I want briefly to address the amendments proposed by the hon. Member for City of Durham. I hope that I can reassure her that much of what she seeks already happens, and that any malign intent that she perceives behind these clauses is not actually there. The cost awards under clause 2 will be made only when one party to an appeal behaves unreasonably. Often, appeals are matters of fine judgment. There are different material considerations—they are, slightly, a question of apples and oranges rather than pears—and different people could, perfectly reasonably, reach different conclusions about how to weigh them up. In such cases, there will be no question of the inspectorate’s issuing an award for costs.
The clause’s intention is to look at those relatively few situations where one party or another behaves unreasonably in taking the matter to an appeal, in the case of an applicant, or in having refused the original application, in the case of a planning authority. I hope it reassures the hon. Lady to know that the Planning Inspectorate currently allows only 34% of appeals, and refuses 66%. The implication is that applicants are more likely than local authorities to be affected by the award of costs in the clause, because the current evidence shows that applicants’ cases are normally overturned by the Planning Inspectorate on appeal and local authorities’ decisions are being upheld in the majority of cases. If it is assumed that unreasonableness occurs in more or less a similar proportion of those events, it is at least as likely and probably more likely that developers, rather than local authorities, will be affected by the clause.
May I put it to the Minister that, without an evidence base, it is quite difficult to make that assertion? He will know that, in many planning appeals, the merits of the argument are finely balanced, as he said. However, in appeals where there is a clear case of unreasonableness, it is often the case that the local authority has taken its decision with regard to factors that should not have been taken into account, or has acted in a way that is plainly wrong. Therefore, there is a much greater likelihood that costs will be awarded against the local authority.
I am grateful to the right hon. Gentleman for raising that issue, because that is what we are trying to root out. We have the national planning policy framework, the primacy of local plans and the vastly reduced nature of national policy—there is no excuse for local authorities not knowing what national policy is because there is so much less of it than there used to be. We are trying to persuade all local authorities that they must make decisions in accordance with policy, whether it is their own local policies—the local plan—or national policies. If they do not, they are behaving unreasonably. They might like to make a decision that does not accord with those two sets of policies, but if they do so, they are behaving unreasonably and are liable for costs.
We hope that the clause will underline the point we keep making: local authorities must have a policy and a local plan, or must find a sentence in the national planning policy framework to justify their decision. If they do not and no other part of government policy, such as a national policy statement, supports their position, they are likely to have their decision overturned and, if the decision is particularly unreasonable, have costs awarded against them. I do not believe that that is an unreasonable expectation to lay upon them.
Not at all. The right hon. Gentleman suggested that local authorities are more likely to behave unreasonably; I have a more optimistic and benign view of them. Given that most of their decisions are supported by the Planning Inspectorate, it is likely that more often it will be applicants who behave unreasonably. They try it on, basically, and see whether they can have another go at a second court. They have deep pockets—usually deeper pockets than local authorities—and so they think they might have a go. It is more likely that that kind of behaviour will be rooted out, rather than the behaviour that the right hon. Gentleman seems to think local authorities are prone to, which I suggest is relatively rare and will become rarer as a result of the clause.
The hon. Gentleman asks a good question. There is a huge amount of case law on reasonableness, which is one of the reasons why, elsewhere in the Bill, we use the concept of reasonableness. It is a well established concept. There is guidance currently on the award of costs. Of course, the planning inspector currently has the ability to award costs. There is published guidance on that, and there always has been. We will be updating that guidance. It will be published, as guidance always is, well in advance of its being exercised.
I do not think there is any great mystery here. If someone has a policy support for their position, it is probably reasonable. If they do not have a policy support, either in the local plan or in national policy, it is probably unreasonable. I do not want to get into the business of predicting how it will apply to every particular case. That is the planning inspector’s job, not mine.
The Minister is being most generous in giving way. Will he inform the Committee whether the Department has had meetings with developers to explain that a purpose of the clause is to change developers’ behaviour? From our discussions with developers, I am not sure that that is their understanding of the clause or, indeed, a possible outcome. It will be interesting to see how the Minister measures whether the clause is successful.
The hon. Lady will be aware that we are all prone to focus more on the mote in somebody else’s eye than the beam in our own. Of course, developers are frustrated by perceptions of unreasonable behaviour on the part of local authorities. All I am suggesting is that the clause will apply evenly, and that the inspectorate will be able to award costs against unreasonable behaviour. Given that the inspectorate is already overturning more developers’ appeals than local authority decisions, it does not seem completely outlandish to expect developers to be affected more often than local authorities.
I will move on to a few of the points embedded in the amendments. First, the hon. Lady asked for explicit ability to take account of mitigating circumstances. I assure her that that is already the case. The planning inspector must allow the parties to present evidence on why their case, even if unsuccessful, was reasonable, before any decision about costs. That will be entirely maintained.
The hon. Lady raised the spectre of the Secretary of State in his imperial pomp making decisions about cost awards. While the current Secretary of State has the wisdom of Solomon, and I trust him to make good judgments on almost any question, he is also a busy man with bigger judgments to make. The clause is intended to do simply this: planning inspectors have a particular set of valuable skills that we want applied to difficult planning questions; the question of awarding costs, and whether behaviour has been reasonable, need not be made by a planning inspector and will take up some time. We therefore propose to make it possible for the Secretary of State to create a new category of officials within the inspectorate called specialist cost officers, who will do this task. The clause has to be framed so that the Secretary of State is able to appoint another person, an inspector, because, as hon. Members know, an inspector is individually appointed to adjudicate particular cases. The intention is not that the Secretary of State himself, but officers appointed for the purpose, would take the decisions.
I am suggesting that we will look to appoint some people to be specialist cost officers within the Planning Inspectorate, who will build a body of work and expertise. Of course, they will work on the basis that the Planning Inspectorate has a long history of making awards of costs. Reasonableness is an issue that comes into those awards as much as it would in this slightly expanded ability. We want to make that a specialist function, rather than take up the time of valuable people who should be focusing on planning decisions. There is nothing more conspiratorial than that lying behind the clause.
That is very interesting information. I have to say that the Minister is full of surprises. Will he tell the Committee how the officers are to be funded, whether they will be on a performance agreement and whether the arrangement will be cost-effective?
The hon. Lady is nothing if not creative. She can conjure up all sorts of spooky scenarios of the evil things that I propose. Unfortunately, what I propose is far more humdrum than she thinks. We will employ people in the Planning Inspectorate and they will report to the chief planning inspector and the chief executive of the Planning Inspectorate. It is simply that the question of whether behaviour was unreasonable and therefore liable to costs is not the same as the question of whether a planning decision was good or bad. We do not want to distract planning inspectors with that decision, but to build up a small group of people who will be employed within the Planning Inspectorate from its existing budgets to do the work.
The Minister was helpful when he said that no additional costs would be related to the additional function and that its costs would be borne by squeezing the rest of the Planning Inspectorate’s funding. All I am hearing is greater bureaucracy and greater complexity, and I hope the Minister can make it clear that that is not the case.
I do not want to allow the hon. Gentleman to put words into my mouth, although no doubt they will be better words than those I come up with on my own. I am not saying that the existing budgets of the Planning Inspectorate will be frozen in aspic. They may need to be adjusted in different directions as a result of some of the decisions taken under the entire Bill, given the different major infrastructure regimes and the designation of poorly performing authorities. Work will be carried out within the Planning Inspectorate, and it will be funded by the Planning Inspectorate. It is simply a question of how we use valuable, skilled people most effectively to ensure that decisions are made in a timely way that is also fair and proper.
No, I am not worried about either of those points because I am not doing either of those things.
Ian Murray rose—
I may have reassured the hon. Member for City of Durham, but perhaps I have not reassured the hon. Gentleman.
I am grateful to the Minister for accepting an intervention from a Scot. At the bottom of its submission GIB 36, one of the United Kingdom’s biggest house builders, Barratt Developments, clearly stated that there
“is a need for clarity and certainty in respect of fees and costs” with regard to clause 2. How would the Minister respond to Barratt Developments?
The hon. Gentleman is unfair. Last week, I said how much we had to learn from the different planning system pursued by the Scots and perhaps—conceivably—even how much the Scottish people and the Scottish Government might want to learn from us. I am therefore always happy to take his interventions.
As I have explained, there is clear guidance on costs awards. It will be updated to reflect the changes that take place, should the two Houses decide to put the Bill into law. That will all be published in advance of the exercise of the new provisions, so everyone will have all the information they need. On that basis, I hope that the hon. Lady will withdraw the amendment.
I have heard what the Minister has said on the group of amendments. Given especially some of the new information that we received this morning about how some of the decisions will be made and the hon. Gentleman’s assurances that the criteria will be updated, we will think about the issue again and check out the additional information that he has presented to us. I beg to ask leave to withdraw the amendment.