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Written Ministerial Statements

Thursday 6 November 2003

DEPUTY PRIME MINISTER

Planning Aid

The Minister for Housing and Planning (Keith Hill): Planning aid is the provision of free and independent professional advice on town planning to groups or individuals in need of such advice and who cannot obtain it without an aid service. It is currently funded by the Royal Town Planning Institute and by grants and donations from public, private and charitable organisations but it is significantly under-resourced and stretched in respect of its current role. On 5 February 2003 the Deputy Prime Minister announced in "Sustainable communities: building for the future" that planning aid would receive up to £4 million of Government funding over the next three years to expand its service.

The enabling legislation supporting wider Office of Deputy Prime Minister spending on planning aid is contained in the Planning and Compulsory Purchase Bill. The Bill received Second Reading on 17 December 2002, Official Report, column 729, and it was anticipated that Royal Assent would be received by September 2003. Funding for planning aid was expected to commence from 1 October 2003. However, as my hon. friend the Member for Harrow, East (Mr. McNulty) explained during the carry-over debate on the Bill on 10 June 2003, Official Report, column 564, the likely timescale for Royal Assent is now March 2004.

Planning aid needs to undergo a significant expansion programme to make it more proactive in engaging with communities who traditionally do not get involved in planning issues. The expansion programme is built on the findings of an Office of Deputy Prime Minister funded research study ¹ which concluded that there was a clear demand for an independent advisory service, but that planning aid was currently running almost permanently at close to breaking point. Delay in funding planning aid until March would severely undermine the good progress being made in this area.

An advance from the contingencies fund is being made available. Without the advance planning aid would be very likely to suffer the loss of key staff and volunteers, fracturing the current regional network. This, along with the loss of momentum brought about by the implementation programme, would set back plans to develop planning aid to a point where it might be difficult for it to recover for some time, even after funding became available.

¹ "Planning aid: A review of its role and prospects for development", ODPM, February 2003.

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Parliamentary approval for additional resources for this new service will be sought in a later Estimate for the Office of the Deputy Prime Minister. Pending that approval, urgent expenditure estimated at £554,000 will be met by repayable advances from the contingency fund.

Planning Obligations (Consultation Document)

The Minister for Housing and Planning (Keith Hill): In December 2001 the Government published a consultation paper proposing that local authorities should set standardised tariffs for different types of development as a substitute for the negotiated planning obligations permitted by section 106 of the Town and Country Planning Act 1990. In July 2002 the Government indicated that they had decided not to proceed with this proposal and would consider other options. They also indicated that many of the Government's objectives could be achieved through non-legislative routes.

Today I am publishing a further consultation document seeking views on firm proposals for the reform of planning obligations. These proposals contain a mixture of administrative and legislative reforms and are designed to increase the speed, certainty and transparency of the planning obligations while retaining flexibility.

New development brings benefits to communities, including homes, jobs, and a range of new services and facilities. Investment in land and property is also an important component of economic growth and higher productivity.

New development can also have an impact on services and infrastructure in the local area. The existing system of planning obligations permits planning authorities to seek contributions from developers, which are used to mitigate negative impacts. They therefore facilitate development, which might otherwise not occur. So planning obligations help the developer, the community and the local authority to work together to deliver successful and sustainable communities.

However, the current system of negotiating planning obligations is often slow, resource intensive and lacks transparency. Development is often delayed rather than facilitated by the process.

The Government have therefore decided to introduce changes designed to give developers the choice between the current negotiated approach offering flexibility and a pre-determined charge, which offers speed and certainty. We will legislate within the Planning and Compulsory Purchase Bill to introduce this new optional charge. We will also revise our existing statement of policy on planning obligations, Circular 1/97, to remove the inconsistency which the policy exhibits compared to case law, to require greater transparency in the use of negotiated obligations, to encourage best practice and to set out our policy in relation to the new charge.

Local planning authorities would be required to set out their charge proposals in advance, giving the developer certainty as to the level of the contribution they will be asked to make and an indication of the impacts of development to which charge income will be

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applied. This requirement will also mean that assessing and mitigating the impact of development will become a plan-led activity. If developers opt to pay the charge, we propose that legislation would prevent local planning authorities from seeking any further financial or in-kind contribution in respect of those matters covered by the charge. Our consultation document invites views on the matters that would be covered. However, planning obligations can extend to non-financial matters as well and we expect that where the charge is paid, a residual negotiation may have to take place. But we are determined to ensure that our final proposals do not ask developers to pay twice.

The developer will always have the option not to pay the charge and to negotiate in the same way as the present system allows. For example, negotiation might still be necessary for difficult, financially marginal or special cases where a negotiation can better mould the agreement to the proposed development. We propose that our new policy will require all local planning authorities to adopt existing best practice and set out the matters to be covered in negotiation in local planning instruments. So transparency and predictability will be increased even where the developer opts not to pay the charge.

We propose to amend the Planning and Compulsory Purchase Bill to enable us to make these reforms. These amendments will provide a power to establish the new optional charge but we intend to use secondary legislation to set out the detailed framework. This secondary legislation will be informed by the outcome of the consultation, an approach that will enable business, local government and other stakeholders to contribute to the development of the new system. To aid this further, I aim to publish draft Regulations in January and in spring 2004 we will also consult on a new draft Circular to replace Circular 1/97.

The consultation period runs until 8 January 2004 and we welcome views on how best to make our proposals work for everyone involved in securing sustainable communities: developers, local authorities and the communities they serve.

The Government appointed Kate Barker earlier this year to investigate factors affecting the supply of housing, including the role of the planning system. The Government will consider any relevant recommendations of the Barker review before it finalises its planning obligations policy in summer 2004. Representations already made to the Barker review on the subject of planning obligations will be taken into account as the Government finalise their policy.

In conclusion, the Government believe that the proposals offer an opportunity to resolve this difficult area of policy in a way, which retains flexibility where necessary and offers speed and certainty where possible.

INTERNATIONAL DEVELOPMENT

Low-Income and Middle-Income Countries

The Secretary of State for International Development (Hilary Benn): I have previously indicated that changes would be made to planned future programme

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allocations for middle-income countries over the next two years. This results from decisions taken on financing for Iraq and the Government's commitment to increase the proportion of our direct assistance going to the poorest countries.

As reported in the Department's 2003 Annual Report, we are planning to increase significantly total bilateral allocations for DFID's country and regional programmes over the next two years from this year's estimated total of £1.429 billion to £1.762 billion in 2004–05 and £2.078 billion in 2005–06. This includes meeting the Prime Minister's commitment to increase our spending for Africa to £1 billion annually by 2005–06; and increasing our spending in Asia by some 45 per cent. to nearly £800 million by the same year. Overall, the UK's aid budget will grow to nearly £4.6 billion by 2005–06, an average annual increase over the 2002 spending review period of 8.1 per cent. in real terms. The UK's level of Official Development Assistance is set to reach 0.4 per cent. of national income by 2005–06—a 93 per cent. increase in real terms since 1997. This is evidence of this Government's continued commitment to make progress towards meeting the UN target of an ODA/GNI ratio of 0.7 per cent.

As set out in the 2003 Departmental report, responding to changes in circumstances is an integral part of DFID's work, and financial allocations for future years are subject to change. We had already planned to reduce the overall allocation to middle-income countries in order to allow an increase in spending on the poorest countries.

Over the next two years, funding for the reconstruction of Iraq includes £50 million reallocated from planned programmes, together with DFID contingency funding of £115 million and contributions from other Government Departments. Our Public Service Agreement includes the commitment to increase the share of our bilateral programme going to low-income countries to 90 per cent. by 2005–06. As a consequence of the temporary increase in funding for Iraq, which we expect to return to middle-income status soon, we will also need to move a further estimated £50 million from middle-income country programmes to low-income country programmes. This is in line with our commitment to the 90 per cent. target.

The total effect of these changes will be a reduction in planned bilateral spending in middle-income countries in 2004–05 and 2005–06 of around £100 million. Funding for programmes in middle-income countries during the current financial year will not be affected. Our budget for humanitarian activities will remain as planned.

We will continue to provide substantial support to middle-income countries through our contributions to multilateral institutions. In 2001–02 this amounted to some £600 million, of which some £350 million was for middle-income developing countries; and the rest was for middle-income countries in transition.

These changes in planned bilateral allocations will involve withdrawal from programmes, earlier than we had previously decided, from a number of middle-income countries, which are less dependent on UK bilateral aid. Romania, Bulgaria, Croatia, and Egypt

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are in this category. Our planned programme in Jordan will be re-phased. Our current programmes in Anguilla and TCI will now close in 2004–05, a year earlier than originally planned.

We will be continuing with our bilateral programmes, with some reduction in spending levels and in some cases an adjustment of focus in the following countries/regions: South Africa, China, Sri Lanka, Russia, Jamaica, Guyana, Brazil, Bolivia, Serbia and Montenegro, Bosnia, Albania, Kosovo and the Caribbean. Our small programme in the former Yugoslav Republic of Macedonia will close by 2005–06, as will the small programmes in Peru and Honduras. We will be developing a new approach to regional involvement in Latin America. Our programmes in the Palestinian Authority, Montserrat and St Helena will remain unaffected; and we will retain a programme in Nicaragua.

I also propose to increase, from 2005–06, our partnership funding for NGOs, including those working with middle-income countries and Latin America.

My officials are in touch with all of the countries affected by these changes in plans. We are also talking to the multilateral agencies and some other bilateral donors about the scope for increasing our cooperation with them. This will be reflected in the new middle-income country strategy that the Department is preparing in consultation with other Departments in Whitehall. I shall report further to the House on the impact on individual country programmes once these discussions are complete.

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