Levelling-up and Regeneration Bill (Fourth sitting)

Neil O'Brien Excerpts

Committee stage
Thursday 23rd June 2022 Public Bill Committees

[Stuart Andrew]

Q You have been quite a champion of brownfield sites and regeneration, particularly with a focus of trying to preserve many of the greenfield areas in the West Midlands. There are a number of planning reforms in the Bill. Do you see those as potentially helping you in your aim to deliver the housing that the West Midlands needs and, in particular, to level up the parts of the region on which you are really keen to focus?

Andy Street: I will give you a straight answer to the question in one moment if I may, Mr Andrew, but let me give a bit of general context. This, I think, is a very good example of where the combined authority has been able to demonstrate the fundamental principle that each can achieve things that individual local authorities working on their own probably would not have done. Of course, the critical point is that we achieve it by working with our local authorities, but we can clearly demonstrate that we have brought additional firepower.

The stats are very clear: we have hit our housing target in this region over the last four or five years, and we had, pre pandemic, doubled the number of homes being built every year in this region. One way that we were able to do that is, of course, working with central Government by deploying the brownfield land funding that the Department for Levelling Up, Housing and Communities had allocated to us in various tranches. We have made the existing system work, and very clearly we probably would not have had a negotiation—for example, Walsall or Wolverhampton separately—with DLUHC had we not existed.

Coming to your question, we are doing this against a good backdrop. We hope we will win further funding in due course to advance this even further, but on the reforms in the paper—it is a general question—essentially I would be supportive of them because they do bring simplicity to the operation. I do think that one of the challenges we constantly face is the time difficulty in drawing these items to a conclusion.

[The Parliamentary Under-Secretary of State for Levelling Up, Housing and Communities (Neil O’Brien)]

Q Thank you, Andy, for joining us. The Bill makes various provisions to speed up and to simplify the creation of new combined authorities and to make it easier, as we have just discussed, for Mayors to take on PCC powers. It also makes it easier to create combined authorities in two-tier areas through the combined county authorities clauses. Do you think the extension of mayoral combined authorities to more areas of the country is a good idea, and what would your advice be to places that are setting up new combined authorities?

Andy Street: The answer to the first question, in one word, is yes. Let me explain why, and this is something that Minister O’Brien and I have talked about for probably a decade, since we were both in previous roles. If you look at the economic history of this country and compare it with other, similar countries, we definitely have a weakness in the out of London areas. There is nothing original there; we know that. Of course, part of the answer is to try to address that in what you might call areas of sufficient scale. I think the thing that the combined authorities have done, as you could argue that the more successful and bigger LEPs did as the precursor to it, is begin to think about economic policy at an appropriate spatial level, or what the books would probably call a natural economic area—a travel-to-work area or whatever. That, I honestly think, has been one of our great successes. Transport policies do not stop at the end of Birmingham when it moves into Solihull, as Gill’s market does not stop at the end of Wolverhampton when it moves into Dudley. We have been able to think about these determinants of economic success across the appropriate geographical area. In our case, that is not yet fully complete, and if you look around the country, you see that other combined authorities are more clearly incomplete in that sense. I would argue that they should be encouraged to expand to fill their natural economic areas.

In terms of the advice, I think there is one simple word: you have to make sure that everybody is up for it. I do not believe this should be imposed. I do not think this should be about unwillingness. I do believe there needs to be a sort of buy-in to the core principle that the very first question is that everybody has got to be prepared to compromise and make this work for it to be a success.

[Neil O’Brien]

Q Thank you. I have a very brief supplementary. One of the levelling-up missions that this Bill puts on a statutory basis is to increase the public domestic R&D spending outside the greater south-east by a third over the spending review period, and one of the institutions helping us to drive that is the new innovation accelerator in the West Midlands. How, other than through the legislation that we are passing, can we achieve that goal of driving high-quality public investment in R&D outside the golden triangle, and what role do you think the innovation accelerator can play?

Andy Street: Brilliant. I actually think this is probably one of the single most important parts of this Bill, and I am not sure it has had—what is the word?—the celebration it probably deserves. If you look at the long-term determinants of inequality, the intensity of R&D in an area is absolutely critical. You only have to look at the states of the Union and at an area such as Massachusetts and its leadership in R&D in medtech to see how Boston has become the most successful city in that sector by a country mile.

We have had a lopsided country in terms of public R&D—not just a little lopsided, but hugely lopsided. If you look at the West Midlands, we are very successful at drawing in private R&D, and we are very weak at drawing in public R&D. Our ratio here is four to one. It is definitely the worst in the whole country. It is ironic, isn’t it, because the private sector sees the opportunity and the public sector has not seen it in the same way? So for the Government to commit to tilting that and leveraging in even more private sector cash on the back of that is very important.

What has got to happen to do it? Frankly, we have got to change our approach to some extent. There is a whole piece here about cluster theory. Our public R&D has been incredibly focused in a very small number of research councils and research universities, which are basically around our automotive sector. We need to continue to play to that strength, but then to balance that by looking at the medtech sector, the fintech sector and clean growth. That is where we will be putting our focus in the innovator accelerator, so that it is a catalyst for us to improve our performance in new, adjacent sectors. So that diversification approach is a very important sprat to catch a mackerel—that’s what I call it.

[The Chair]

I call Rachael Maskell.

--- Later in debate ---

[Matthew Pennycook]

Q Finally, do you believe that clause 117 could potentially lead to an erosion of existing environmental protections? Do you believe that clause 120 provides adequate protection? Will it ensure that, at a minimum, there is no regression from existing protections? If not, how would you ideally like to see the Bill strengthened?

Dr Benwell: I should have brought my copy of the Bill. There are actually some very good bits in clause 117. The Government have done quite a good job of writing in the mitigation hierarchy, which is welcome to see. The problem is linked through to clause 127, which allows everything in preceding parts simply to replace existing environmental law. It would be much better if the Government came forward with fully worked-up proposals for how to strengthen the existing system of the EIA and SEA, rather than taking the approach of giving themselves the powers to take out layers of environmental law and put in something different.

You mentioned clause 120, the so-called non-regression clause. It is obviously a good thing to have a commitment not to weaken environmental protection, but I am afraid that the efficacy of such a clause is really in doubt, for a number of reasons. First, it is the Secretary of State in whose opinion environmental law has to be maintained at an equal level. That is a highly subjective opinion left in the hands of Ministers—and, just to emphasise, not a court in the land would challenge that on the basis of ultra vires without it being patently absurd. Courts are really deferential to decision makers, so if a Minister were to say, “Yes, this is equivalent,” that statement would have to be really, really daft for a court to challenge it. So we think that that kind of non-regression provision is unlikely to be robust.

Secondly, the other noteworthy part of the non-regression provision is that it talks about overall levels of protection. That is where we come back to the idea of talking about the environment in aggregate and those big broad trends of species-level data, which is really important—like Carolyn, I think that we should be linking back to the Environment Act targets—but it is not sufficient. We must keep in place the rules that protect the particular, the peculiar and the exciting at the local level that matter to important people, and those local populations of species and habitats that are so important. Otherwise, we get into a runaway offsetting mentality where the assurance that things will be better overall can be taken to obscure a lot of harm to the natural environment at the local level.

So there are some good things in clause 117 and some nice sentiments in clause 120, but overall they do not give the reassurance that would be provided by simply taking time to work up provisions in full and bring them forward in primary legislation rather than giving Ministers the power to swip and swap through regulations.

Paul Miner: I have nothing further to add on this question.

Carolyn McKenzie: I have nothing further to add other than to reiterate the local element. You do get lots of peculiarities in different areas, and they can be lost, so we must make sure that they are not.

[Neil O’Brien]

Q This question is directed at Paul in the first instance. The Bill contains a number of measures from the infrastructure levy to strengthening compulsory purchase order powers, high street rental auctions and heritage protections that are intended to drive more brownfield, urban regeneration. It also contains measures to create more combined authorities with transport and regeneration powers as part of building on the Government’s urban uplift and shift towards a regeneration-led approach to planning and housing. What assessment have you made of the advantages in embodied carbon of building reuse and of denser, better public transport-connected cities in reducing pollution? What is your take on that model of development?

Paul Miner: We think that a brownfield-first approach to new housing and commercial building development can have a number of benefits. We have seen constantly over the years that there is enough brownfield land available for over 1 million new homes in any given year, and this supply of brownfield is constantly replenishing as more sites come forward, and it is possible to build at higher densities.

We think there are a number of clauses in the Bill that could help with brownfield regeneration, such as those relating to changing compulsory purchase order powers, as you have mentioned, and the infrastructure levy. Getting local plans in place more quickly will also help to bring brownfield sites forward. So we see a lot of benefits to a brownfield-first approach.

However, the problem we have consistently had over the past 15 years, under both Conservative and Labour Governments, is that it has been easier for large housebuilders to bring forward speculative developments through the planning system, often not contained within local plans, than to be able to get these schemes through at appeal. We think there are a number of measures the Government need to look at.

Some of these may involve legislation but more involve changes to policy to give councils more power to set targets for the amount of housing needed in their area, to make sure that housing targets reflect what is likely to be built in the area, as opposed to what house builders say when they claim to be meeting housing targets that they then do not build, and to identify local needs for affordable homes. In many areas of the country they are crying out for affordable homes, but the kind of housing that is being built is not meeting those identified needs.

We recognise that there is a lot in the Bill that is helping to bring forward the benefits of a brownfield-first approach, in terms of, as you say, embodied carbon, saving precious agricultural land and regenerating communities in of need levelling up. At the same time, we think there is scope to do much more.

[Neil O’Brien]

Q Let me extend that question to Carolyn.

Carolyn McKenzie: To build on what Paul has said, I think the circular economy is missing from the Bill. There is not much that is looking at what can be reused, recycled or reclaimed. It is about the new, and sometimes that is not the best way to go. Specifically around things like housing retrofits, it is about repair and regenerate rather than new housing. There is not that look at retrofitting that there should be, bearing in mind that the majority of housing we have is already in existence.

[Neil O’Brien]

Q One of the other things the Bill does is take forward measures to widen and deepen the devolution agenda by making it easier to set up new combined authorities, for authorities to join them and for them to gain new powers. How would you like to see the devolution agenda drive positive environmental outcomes? Is it primarily through helping towards our transport mission and better public transport? Is it through the housing quality mission? Or is it something else entirely? How do you think the devolution agenda can best serve a wider environmental agenda? I put that to Carolyn first.

Carolyn McKenzie: The first thing would be to actually have a mission in the Bill that relates to environmental outcomes, as the Bill does not have such a mission in there. Even though there has been some commitment to sustainable and non-competitive funding, if there is no mission then you cannot link that back. When you have funds such as the shared prosperity fund, which will take regard of the environment, if there is no mission you cannot just say, “Well, this is a priority.” So having a mission on the environment would definitely push this along.

There is a need within devolution to be clear about people’s roles. At the minute, everything that is done around climate change is done by local authorities, both at county and district level, because they have been driven to do so by the public through climate emergencies. It is not because we are being asked to do it. That drives action, absolutely, but it drives different types of action—inconsistent action—and the data is different so you cannot compare.

Also, when you get things like covid coming along, or Ukraine, or inflation, the risk of dropping down the agenda is really high, so that sustainable approach to funding is needed, rather than there being small pots of funding and grant-based funding, which can change and is short-run and competitive. That approach is not great for really putting down the foundations and encouraging local authorities to work with partners and to partner up. We are looking at working with the private sector, residents and other public sector bodies to really partner up their funding with our funding, to get more bang for our bucks and to achieve more through things like volunteering to plant trees, which involves health and social, and tackling fuel poverty, which keeps people out of hospital as well as reducing carbon emissions. As I keep saying, that integration is really key.

Again, when we look at things to spend money on, we really need to look at what is needed at the local level. There are lots of things that will be consistent that people need to spend money on, but there will be lots of differences and nuances at the local level that will make it better spent. I reiterate again that 41% of Surrey’s emissions—we are not unusual among other authorities—are down to the private car. With little or no funding for public transport, it is a really difficult target to hit to get people out of the car. You can get people to change to electric vehicles, but that has an equalities aspect to it: not everybody drives and not everybody can afford it. Public transport and good safe routes for walking and cycling are really crucial, as is the housing side, again.

[Neil O’Brien]

Q Thank you. Paul, on the transport powers that are devolved through devolution deals, as well as getting more people on to public transport, which is good for the environment, what is the potential impact of improved public transport in driving more brownfield regeneration rather than sprawl? You must have done quite a lot of work on this kind of thing.

Paul Miner: Yes, we have done plenty of work on that, which we can send to the Committee. In particular, we produced a report a few years ago on public transport-oriented development, which showed that you could get much higher densities in urban areas that were already served by an intensive public transport network. In turn, that mutually reinforced and made sustainable public transport improvements within that area. There is certainly more on that that we could send to the Committee, which we would be very happy to do.

In addition to Carolyn’s point, I also want to say something very quickly on the rural aspect as well. Cornwall in particular is a possible trailblazer on rural devolution, in terms of what it has been able to do to integrate its transport network—that is in trains, ticketing and single points of information. It has also done some great work in terms of setting housing policies and on retrofitting rural housing stock. It does seem to be an exciting model that others could look at.

[The Chair]

Richard, we have not forgotten you; we will ask you to comment in a second.

Carolyn McKenzie: The key point on that is that there are so many different actors and so many different funds in respect of devolution. It is about looking at how we co-ordinate that. I am proposing to my authority to look at taking a lead climate change authority approach, similar to the lead local flood authority approach, so that we can actually co-ordinate, get the data down, look at what is relevant for the local level and deliver on that. We can then use that data to influence the funding that we bring in or to influence Government funding pots, so it is appropriate. That co-ordination element among all the different sectors is really key. At the minute, it is not there around environment. There are lots of different people and lots of different areas to come from.

--- Later in debate ---

[The Chair]

I call the Minister.

[Neil O’Brien]

Q Through the devolution agenda, we have devolved powers at scale over things such as transport and regeneration, giving places the power to create things such as development co-operations. Through this Bill, we will make it easier and quicker to set up new combined authorities, particularly in two-tier areas, and make it easier for them to widen and take on new powers. There are also a range of measures in the Bill to drive more brownfield regeneration—the infrastructure levy, CPO reforms, high street rental options, street votes, heritage protections, and so on.

As we negotiate devolution deals with areas such as Derbyshire, where we are in talks at present, how do we best bring together the new instruments and new combined authorities to achieve everything we potentially can through spatial planning to drive the kind of join-up you have been arguing for in this session?

Dr Ellis: That is a complex question, but time is short. The single biggest issue is with trust and public consent—whether the people of Derbyshire understand the benefits of the combined authority. I am tempted to say, at the moment, that they do not. People have talked in the past about double devolution, and I think that is still important. You have two problems going on; you have the fantastic opportunity that devolution presents to empower local authorities and collections of local authorities, but then you have an important issue about the citizen and trust within communities, and how they relate to that.

In thinking about the devolution agenda, it is important to show regard and care to things such as parish and town councils—that lower tier—and what powers they might get. Otherwise, all that happens is that you shift the trust problem down a notch. The opportunity is there when resources and powers are provided for places to begin to set a new course that tells a story about that place. That is desperately needed in this country.

My only fear is that we need coverage across most of England—we do need that—and the ad hoc nature of this is giving different powers to different areas. The status of the strategic plan in Liverpool, legally, is different to the one in Manchester, which is different again to the London plan. That might be fine, but it also creates levels of legal uncertainty. There is a tension between those things, but I would continually emphasise the point on community trust and what communities can do, as well as what local authorities can do.

[The Chair]

Thank you, Mr Ellis, for your clear and concise evidence. We very much appreciate it. We must now move on to our seventh session of the day.

Examination of Witnesses

Gavin Smart and Kate Henderson gave evidence.

--- Later in debate ---

[The Chair]

Gosh. Is the Minister starting this one?

[Neil O'Brien]

What fun.

[The Chair]

What fun you will have, Mr O’Brien.

[Neil O'Brien]

Q Thank you, Mr Bone. May I apologise, as I will have to leave a few minutes before the end of the session?

Alex and Will, thank you for joining us in person. The Bill takes forward the devolution agenda by making it easier and quicker to set up new combined authorities, particularly in two-tier areas. It also contains a number of powers to speed up and improve regeneration, from the infrastructure levy to compulsory purchase order powers, high street rental auctions, street votes, heritage protections and land market transparency. How can we use both the devolution agenda and these new tools best to drive urban regeneration and more brownfield development—the kind of development that a lot of people want to see? How can we build on what we are doing in the Bill and make the powers that we are creating work most effectively? I will pick first on Will and then go to Alex.

Will Tanner: First, thank you for having me. It is a very important question, and the Bill goes some way towards answering it. The Bill tries—if I may infer Ministers’ intentions from it—to establish a much greater level of strategic authority in the planning system to bring together different elements that are important for regeneration and economic development in local areas. That includes building some of the institutional framework in the form of both more and stronger mayoral combined authorities or equivalents in counties and giving them clearer incentives to intervene and bring land together with other forms of intervention—I point to the infrastructure levy in particular in that regard, not just at mayoral level but below—as well as creating much greater transparency in information to allow the system to work more effectively and generate more community buy-in. That is both at a national level through the levelling-up mission framework that the Bill sets out, setting a clear direction on where the levelling-up agenda is due to go, and more information for consumers of the planning system through the digital planning framework and, indeed, through greater powers to require information on behalf of local authorities such as owners of high street shops and other parties locally.

Alex Morton: I am a little more sceptical on parts of the devolution agenda. It has worked very well in some places, such as Manchester, but less so in others. London has probably one of the biggest housing backlogs, and obviously it has had a Mayor for a very long time.

For me, the most interesting and best thing about the Bill is the focus or push around trying to make local plans more delivery-oriented, moving towards a system of local plans as delivery mechanisms and not huge, long lists of policies by moving some of that policy up to a national level. It would be good to discuss that further. I think that is the right aim, but there are some difficulties in how that is planned to be done. The shift away from a five-year land supply is also welcome.

Listening to people earlier, what often came up is planning issues x, y and z. Really, planning is just to deliver enough land, so that enough homes are built, we meet housing delivery targets and we do not have a housing crisis. Almost everyone else has a strong interest in planning doing mixed communities, planning doing sustainability, planning doing an ageing society and planning doing obesity. Planning is not really meant to do all those things; it is not some kind of titan that can hold the world on its shoulders. The whole point of planning is that there are sufficient land released to a different mix of developers who will build enough homes so that we do not have a housing crisis. If the Minister is inclined to put in place some kind of definition of what planning is, I would say that planning is designed to make sure that we build sufficient homes of sufficient quality in the right places—full stop. If the planning system could just focus on doing that, we might have less of a housing crisis, with everyone shoehorning everything else under the sun—important and noble though those other things are—into the planning system.

[Neil O'Brien]

Q Thank you. Can I press Alex on street votes? Is this something you welcome? What observations, if any, do you have about how we could potentially make a success of that policy?

Alex Morton: I think street votes are a very good idea. They are a way to try and encourage communities. They are not a solution to everything—I think we have to be honest about what street votes are. Street votes are in areas where there is high demand in housing and you have relatively low density—particularly Metroland, for example, in London—where you might be able to persuade people to replace a certain amount of terraced housing with four or five-storey terrace streetscapes, which would be quite attractive. That could be a good way in lots of high-demand areas, without building on green belts and green fields, to get a recycling of space. That used to happen. For most of our city’s history, that densification process was natural. You had a single landowner usually—sometimes aristocratic, sometimes merchants, sometimes commercial holdings—who would buy blocks, demolish them and build them up. You have to do that now in a way that is consensual and fit for the 21st century.

Street votes are a way to try to get people together and say, “Look, we can all, on our street, agree that we can build up another few storeys. We will all benefit from this. This will mean that we do not have to build on greenfield sites on the edge of London.” I do not think we should be too optimistic about it in the next, say, five years solving the south-east’s housing crisis. However, it has to be something that the Government moves at great speed on, to try and put pilots in place to get this going, so that if it can work—I think it should—we can then roll it out on a wider scale. That said, I do not think, sadly, that it will alleviate the pressure on green fields in the next five or 10 years, but it is a thing we need to do now if we are to stop building on more and more of our land surface.

[Neil O'Brien]

Q I have one last question, for Will. One of the things the infrastructure levy does is have the neighbourhood share, in the way that CIL does, but CIL only applies to a certain number of authorities. How might that connect to the work you have been doing on what you called double devolution and neighbourhood-level governance?

Will Tanner: I thoroughly welcome the commitment to maintain the neighbourhood share within the new consolidated infrastructure levy. As you say, the infrastructure levy is compulsory rather than optional and it will apply everywhere, so it represents an opportunity to share a considerable amount of revenue directly with communities where the right governance exists. Parish and town councils only cover about 37% of the English population at current levels—about a third of local authorities are fully parished—so only a relatively small number of places will be able to take advantage of this at first. The inclusion of the neighbourhood share will create a very strong incentive for local areas to put in place strong, hyperlocal governance to control local decision making and some local services within a general power of competence that exists for parish and town councils.

We know from our research that there are strong benefits from that. If you look at rates of volunteering, rates of group membership or rates of local philanthropy, all those things are higher in areas where parish and town councils exist. So I am very supportive of the Government’s efforts to try and create a stronger incentive for places to put in that local governance and to benefit from the gain from development. I would also suggest that it should create a stronger incentive for places to become more welcoming of development as a whole and therefore embrace new housing.

[Neil O'Brien]

Q On CPO powers, which the Bill streamlines by speeding up the process and simplifies by taking out bits of the process, while also potentially enabling the capturing of more value for the community and for wider infrastructure projects, with implications for consent and regeneration, what observations, if any, do you both have about the plans in the Bill on CPOs and how we make a success of them? Shall we go to Will first, then Alex?

Will Tanner: As the Minister will know, Onward’s first ever paper looked at this issue in some detail. As the Committee will know, at the stroke of a planner’s pen, the value of a piece of land can go up 100-fold. There is an opportunity for the UK to do much more to capture the gains from development in a way that other countries, such as the Netherlands, do more systematically. The Bill goes some way towards doing that through the simplification and clarification of when local authorities can use CPO powers, which will hopefully make CPO more widespread.

I think the greatest opportunity lies in the clarification of what constitutes fair market value. That is a relatively contested area of policy; there are lots of different views from different areas. I thoroughly welcome the proposed Law Commission review into this area of legislation more generally, because I think legislation has spread over a number of years. However, there is an opportunity for the UK to more systematically capture those gains for development, and allow local authorities to buy and assemble land—especially with regard to ransom strips and small plots that hold up development—to capture those gains for public benefit. So I am supportive in principle but keen to see a bit more detail.

Alex Morton: I support the idea of streamlining CPO. I would be quite nervous, as a small “c” conservative and a small “l” liberal, about the measure to have a direction from the Secretary of State setting out the value of land. As Will has just suggested, there is a potential area in terms of ransom strips or other areas. If that was narrowly defined in legislation, so that, for example, on brownfield sites where there is multiple land ownership, there may, in exceptional circumstances, be a direction by the Secretary of State, that would be quite different from the current powers, which look like they could be abused by a future Government that was not sympathetic to property rights.

There is a case, with some ransom strip owners and some landowners who hold out and are unreasonable, for there to be some kind of change to get those people. But that is a big shift in property rights, which should probably be set out in primary legislation and very tightly circumscribed to small areas of brownfield land where there are multiple landowners, or be more tightly defined than the current situation, which I think could be abused—probably not under this Government, but under a future, more radical Government that did not support property rights.

[The Chair]

Mr Pennycook.