Housing and Planning Bill

Lord Foster of Bath Excerpts

Tuesday 22nd March 2016 Lords Chamber

[Baroness Williams of Trafford]

My Lords, Amendments 99 and 100 would insert into the Bill requirements on local authorities and others where there are already appropriate protections in national planning policy and guidance to address these issues. National planning policy already incorporates elements of the agent-of-change principle by making it clear that existing businesses wanting to develop in continuance of their business should not have unreasonable restrictions put on them because of changes in nearby land uses since they were established.

The Government recognise concerns about the impact of new residents moving into an area with an established live music venue. As the noble Lord said, my ministerial colleagues met industry representatives in January to discuss this matter. We have responded to their concerns by including a provision in the office-to-residential permitted development right. This enables local authorities to ensure that mitigation measures address noise impacts from existing businesses on the residence. It will both help to protect residents’ amenity and to ensure the sustainability of established businesses.

The noble Lord asked about Scotland and Wales. Of course, planning is devolved there. He also asked if there is a plan to apply new prior-approval measures in relation to noise impact to new builds and not just to buildings undergoing a change of use. The permitted development rights take effect on 6 April and apply to changing the use of buildings from office to residential. The application for new build residential property will be considered under the NPPF, which incorporates elements of the agent-of-change principles. The noble Lord also asked if the regulations will only allow local authorities to take noise into account, not oblige them to do so. The regulations allow local authorities to take account of noise where it is relevant rather than obliging them, because that would be an inflexible requirement.

[Lord Foster of Bath (LD)]

My noble friend Lord Clement-Jones asked a further question about the retrospective nature of the very welcome government proposals. I absolutely appreciate the real difficulties with retrospective legislation, but what advice and guidance will the Minister give to those music venues which will be affected before the change comes into effect? Can she also say what changes she will make to the guidance being given to local authorities?

So that the Minister is aware how serious this is, it is worth reflecting on the situation of the Fleece in Bristol, which started the campaign to change this. Chris Sharp, who led that campaign, points out that although he is pleased with the Government’s announcement:

“The irony is that the venue that was doing the most to change the law is being left out in the cold”.

It continues to have a problem.

[Baroness Williams of Trafford]

I will write to the noble Lord with details of the revised guidance and in response to the other questions he asked.

Amendments 101A and 101B would allow local authorities to consider the local community’s views and local and neighbourhood plan policies on a wide range of matters under the office-to-residential permitted development right. This has provided greater certainty for developers and has successfully encouraged more development, delivering much needed new homes. As my noble friend knows, where there is a localised impact on the office market, councils have power to remove permitted development rights. The Article 4 direction process provides more robust safeguards than the council resolution proposed by the amendment.

I have heard noble Lords’ words about the impact of this. I understand that 1,600 new homes were developed in London under PDR in 2014, and 8,000 in total. I also understand that it does seem, as the noble Lord, Lord Kerslake, said, to be a problem in particular areas of the country. My noble friend and I have spoken about this, and although in Trafford, PDR is very welcome, it is clearly having an adverse impact in Richmond. I suggest that as the hour is late I meet my noble friend and the noble Lord, Lord Tope, before the relevant part of Report to discuss this further. I am not promising that we can move any further forward—and I understand what my noble friend said—but perhaps we might make some progress.

Moving to amendments 100ZAZA and 100ZAZB. I understand that Amendment 100ZAZA would insert specific requirements for local authorities to consider where permitted development rights allow for the change of use to residential. The amendment is not appropriate and would impose inflexible and unnecessary burdens. Permitted development rights strike a balance between encouraging development by providing greater certainty and allowing local consideration of specified matters. Such matters will depend on the building changing use to residential use. Where there are wider concerns, of course local authorities can make an Article 4 direction.

Amendment 100ZAZB aims to remove the local authority’s liability to pay compensation where an Article 4 direction is issued with immediate effect. It will also allow the local authority to charge a planning application fee where an Article 4 direction requires a planning application to be submitted. Where a local authority brings forward an Article 4 direction, the current compensation provisions, alongside the exemption from paying an application fee, strike a fair and appropriate balance. They recognise that a national right is being withdrawn for development that is considered acceptable while ensuring that the local authority’s liability to pay compensation can be limited.

That said, I reiterate my offer to my noble friend and the noble Lord, Lord Tope. I realise that what I have said may not have satisfied them, but I ask—

--- Later in debate ---

[Lord Beecham]

My Lords, the amendment in my name and those of my noble friend Lord Kennedy and the noble Lords, Lord Shipley and Lord Foster, is very much consistent with the other amendments. However, I draw a comparison between what is being proposed here and what is happening in the legal world, where the Ministry of Justice is not just engaged in full cost recovery, but seeking in its court fees and other levies to recover more than the cost of the service. This does not go quite as far as the Government are prepared to in the justice field. For that it is all the better.

However, I wonder what the implications would be for this scheme if, as other parts of the Bill would perhaps lead to, we saw the outsourcing of the planning function, which would then potentially become a commercial activity. That might have certain difficulties when lined up with the amendment proposed here. Having said that, I certainly support the amendment and I hope that the Government will respond sympathetically to it.

[Lord Foster of Bath]

My Lords, the noble Lord, Lord Beecham, quite rightly said that all three of these amendments are related. However, there are differences. The amendment in the name of the noble Lord, Lord True, as I understand it, merely says that there will continue to be a nationally imposed fee framework, but in which full cost recovery will be possible, whereas the amendment in the name of the noble Baroness, Lady Gardner of Parkes, and the amendment that my name is attached to, suggest the devolution of responsibility for fee setting to local authorities. I hope that that is the direction that the Minister will be prepared to go in.

When I was the Member of Parliament for the wonderful city of Bath, my local authority had real problems because, as a world heritage city, it had extra things to deal with, such as archaeological issues, for the very large number of properties that it had to give various forms of planning consent to—as listed buildings and so on. Of course, that also cannot be reflected in the fee structure, so, like many other councils, it had a huge deficit between the fees that it could charge and the costs it incurred.

In 2012, when the Government were carrying out the previous review of the fee structure, it participated in an exercise in which there was a very detailed analysis of every minute and hour spent by staff employed and all the other costs. It showed very clearly that it was recovering no more than 50% of its costs. That is reflected by many councils; I am sure that many noble Lords have seen the figures from London Councils, which show that they are many tens of millions of pounds adrift each year.

The problem is that if we look at this just as giving councils the ability to charge more to cover their costs, I can see the Minister looking horrified, because she wants improvements in standards to go alongside it. The interesting thing is that there is a real opportunity to combine the two. Although I accept what the noble Lord, Lord Kerslake, said about planning performance approaches adopted through the planning performance agreements, nevertheless they have demonstrated very clearly in the one area where local authorities can charge over and above the fee structure that they can develop some very innovative and ambitious approaches. If we give this additional power over fee-level decision-making to our local councils and local planning authorities, I believe that that will be combined with some very adventurous and innovative ways forward.

Finally, I have one simple question for the Minister. If she is not going at least to allow the amendment proposed by the noble Lord, Lord True, with full cost recovery, I wonder how she envisages a later part of the Bill when she wants to give the opportunity for experimentation to private organisations coming into the planning operation. No commercial organisation I know is going to enter a deal where the starting base is only 50% back for any investment. It simply will not happen. I am sure that the Minister has an answer, which will be to accept the amendment from the noble Lord, Lord True or, better still, the other two amendments.

[Baroness Williams of Trafford]

My Lords, I hope that we can end on a happy note this evening. At present, any regulations that allow for different levels of fees in different local authority areas could be subject to the hybrid procedure. This would significantly lengthen the parliamentary time taken for consideration of the regulations. So the effect of Clause 141 would be that such regulations would no longer be treated as hybrid and would be subject only to the affirmative procedure that is usual for fee regulations. The clause would allow this type of local flexibility to be explored without every associated change to the fees regulations being treated as a hybrid instrument.

I know that some noble Lords had concerns that removing the hybrid process would mean that some interests would not be adequately protected. I should like to reassure them that, where such flexibility is proposed, we intend to ensure that there is appropriate consultation at local level, so that people are not disproportionately affected by the changes. We consider this to be a more direct and effective route for individuals to express their views, rather than petitioning against the instrument. There will still be full parliamentary scrutiny of any such regulations under the affirmative procedure.

My noble friend Lady Gardner made the point that it is wrong that big developers can pay the same fees as householders. That is not entirely accurate, in the sense that applicants pay varying fees on the scale of the development being pursued. It is not actually uniform at the moment.

Turning to Amendments 100ZB and 101, which relate to local authorities setting fees up to cost recovery, I should highlight that Section 303 of the Town and Country Planning Act 1990 already provides for the Secretary of State to allow, by regulations, local planning authorities to set their own levels of fees up to cost recovery. We are not without powers to enable local fee setting. Planning application fees make an important contribution to meeting the costs of the development management service, but they are only one side of the resourcing equation. Local government obviously has been driving down its costs too, and giving local authorities freedom to set their own fees brings unintended risks. Removing the sector’s incentive to tackle inefficiencies where they exist—particularly as local authorities are monopoly providers of planning services in their areas—and raising fees in a way that could dissuade home owners or small and medium-sized developers from undertaking developments, would introduce unpredictability for developers just when we need them to be stepping up the number of homes that they are providing. Crucially, providing no link to improved performance would give no guarantee that the additional income would go into planning departments or lead to more timely decisions.

Debate on this part of the Bill has highlighted that planning is a very important public service, with local authorities balancing the private interests of the applicant with those of the wider community. I totally understand the concern of my noble friend Lord True about the taxpayer subsidising developers but, in the context that I have just outlined, it may not be unreasonable for local taxpayers to make a contribution to the cost of this public service. Local authorities can do a lot more to transform their planning departments. Those that have introduced new ways of delivering planning services, for example through outsourcing and shared service arrangements, have shown that performance can be improved and costs reduced. More should be following their lead.

Finally, we are consulting on proposals to increase fees in line with inflation and propose to do this annually. However, changes in fees should go hand in hand with the provision of an effective service, which is why we propose to link future increases in fees to performance. Noble Lords will also be pleased to learn that we propose to enable some greater flexibility in fee-setting where local areas come forward with ambitious plans for reform, such as providing applicants with a choice of a fast-track service in return for a proportionate fee.

[Lord Foster of Bath]

I appreciate that the hour is late but will the Minister confirm what she has just said? She has at least implied that a local authority is likely to get the fee level increase—basically, inflation since 2012. Then she implied that there could be additional money coming forward, whereas as I read the technical consultation document, it says it the other way round: everybody will get the percentage increase but those who are deemed to be doing badly will have money taken away. So it is not a case of everybody getting up to that level and then a bit is added; rather of everybody getting basically the increase since 2012 but some is potentially taken away.

[Baroness Williams of Trafford]

I hope that the noble Lord and I are saying the same thing. We are saying that we are enabling greater flexibility in fee setting.

[Lord Foster of Bath]

Flexibility down.

[Baroness Williams of Trafford]

Perhaps we can argue that on Report.

[Lord Foster of Bath]

For clarity, is it the Minister’s understanding from the technical consultation document that under the current government thinking no local authority planning department is likely to see an increase above inflation since 2012?

[Baroness Williams of Trafford]

Yes, it is, my Lords. I am sure we will argue this long and hard on Report.

Amendment 100ZAC, tabled by my noble friend Lady Gardner, seeks to enable local authorities to charge fees that exceed cost recovery in respect of their planning functions. The Government’s guidance on handling public funds entitled Managing Public Money states that charges and fees, like those for planning applications, should be set at cost recovery so that the Government do not profit at the expense of consumers.

Local authorities also have the power under the Local Government Act 2003 to charge for discretionary services up to the level of cost recovery. I know many local authorities have chosen to use this power to charge for pre-application advice. While limited to cost recovery, authorities must ensure that they do not make a profit from the provision of pre-application advice over the course of a year. However, I reassure my noble friend that the income generated from planning fees remains with the council. It is for local authorities to determine how these fees are used.

With one slight exception, I hope that noble Lords are satisfied with my comments and that the noble Baroness will feel happy to withdraw her amendment.