First Standing Committee on Delegated Legislation
Monday 7 April 2003
[Mr. Nigel Beard in the Chair]
Local Government Finance (England) Special Grant Report (No. 117) (HC 537) Driving Local Authority Planning Performance 2003–04
The Parliamentary Under-Secretary of State, Office of the Deputy Prime Minister (Mr. Tony McNulty): I beg to move,
That the Committee has considered the Local Government Finance (England) Special Grant Report (No. 117) (HC 537) Driving Local Authority Planning Performance 2003–04.
This report was made under section 88B of the Local Government Finance Act 1988, as amended. It seeks Parliament's approval to distribute a new planning delivery grant to local planning authorities and to the Greater London Authority in 2003–04. There will be other recipients of the grant in 2003–04, and I shall give the Committee details of them so that hon. Members can see the whole picture for the operation of the grant for this year.
I begin with apologies for errors, and I hope that the Committee will indulge me. First, in paragraph 2 of annexe A on page 5, the total should be in pounds, not in millions of pounds—the word ''million'' should be ignored; the figure should be £46,325,098. I doubt whether the Chancellor of the Exchequer would be pleased if I spent £46 million million two days before the Budget. It is a generous grant, but not as generous as some might have anticipated.
Secondly, due to an unfortunate printing error—no slight was intended to the authority concerned—the grant allocation for Adur district council was removed from the list of grant recipients and their allocations. Allerdale planning authority should not be the first in the alphabetical list of authorities to receive grant; the first line should read ''Adur District Council—£138,189''. I should add that those changes will have no effect on the grant distribution to other local authorities—it affects only Adur district council—as all grant figures are fully consistent with the features of the grant set out in annexe B. I apologise for those errors, and for having to bring them to the attention of the Committee at such a late stage. However, they came to light only recently.
Mr. Edward Davey (Kingston and Surbiton): I am grateful to the Minister for being so honest with the Committee. I do not know whether he will be able to reply or whether he will need guidance from you, Mr. Beard, but what are the procedural implications of those two errors, one of which is rather significant?
Mr. McNulty: I am assured that, having read those changes into the record, there are none. If I were to be churlish, I might have said that I expected the Liberal Democrats to have insisted that we should make it £50 million million instead of only £46 million million,
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because whenever we make such announcements the Liberals always demand more.
With those resources come targets. One is that authorities are required to put local development frameworks in place.
Sir Paul Beresford (Mole Valley): On a point of order, Mr. Beard. It is not possible for amendments to be made to statutory instruments, but that, effectively, is what we are getting. Is that in order, or should the report be reprinted and considered later in its corrected form?
The Chairman: The record will show that the Minister has corrected the report, and that is what will be the subject of today's deliberations.
Mr. McNulty: I am assured that an erratum to the report will be published. I am not amending the report, but simply pointing out errors, for which I apologise.
Not only are there resources; there are targets. One target requires all authorities to put local development frameworks in place and to meet the best value development control targets by the end of 2006–07. Another looks towards the delivery of a better balance between housing availability and the demand for housing.
Sir Paul Beresford: Are there any local authorities in England that will not get a grant?
Mr. McNulty: There is no planning authority that will not receive a grant. We decided that all planning authorities should receive a minimum of £75,000. All the other elements are built up subsequently, according to the criteria.
We have established the main design principles for the planning delivery grant, which are settled for the whole spending review 2002 period. As I said previously, those are that PDG money will not be ring-fenced, so authorities are free to use it as and when they like. However, to provide an incentive to improve performance, most of the grant will be paid when there is improvement towards the target, or maintenance of a high level of performance. It is thus principally intended as a performance reward grant. In keeping with what we say elsewhere about freedoms and flexibilities, it is entirely appropriate that the money is not ring-fenced and that we do not offer templates or suggest ways in which it should be spent, if it is spent by planning departments.
Sir Paul Beresford: Is it reasonable to assume that, if a large authority such as Birmingham received the minimum grant of £75,000, that would indicate that it was incompetent?
Mr. McNulty: As ever with these matters, the criteria are far more complex than that, so that assumption is erroneous for all the reasons outlined in the assorted criteria.
Mr. Davey: While talking about ring-fencing, will the Minister confirm that, if an authority receives the performance grant in respect of its planning performance, the Office of the Deputy Prime Minister does not expect that to be spent in the planning department?
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Mr. McNulty: The hon. Gentleman has just offered a different version of ring-fencing from my own. If the money is not ring-fenced, the authority can spend it on whatever it pleases. Our wish—it should be the authority's wish, too, if it wants to secure further planning delivery grant—is that at least a good portion of it is spent in pursuit of improving its planning performance. However, no strings are attached. The authority does not have to spend the money on planning.
Mr. Davey: I am grateful for that clarification; that is what I thought the Minister meant. Does the money come from the £350 million for grant for the planning system over three years that the Deputy Prime Minister announced on 18 July, or is it separate money?
Mr. McNulty: Because the £350 million is called the planning delivery grant, it clearly relates to the first year of the PDG. However, I hasten to add that the first year tranche is the corrected figure of £46 million rather than £46 million million.
For 2003–04, local planning authorities' grant entitlement is based mainly on their improvement in performance against the targets for handling planning applications. Authorities get bigger shares of the grant the more their performance improves. The amount of grant is also weighted to reflect the volume of applications decided. Performance improvement is measured by the change in the speed of handling planning applications between the year ending June 2001 and that ending June 2002. Authorities that were improving in that period receive bigger grant allocations the more they improved. There are three tranches of reward, providing an incentive to greater improvement. Allocations to individual authorities have been made according to their share of the volume of decisions made. We have treated differently the authorities that consistently meet our targets.
Sir Paul Beresford: Does the Minister agree that this is one difficulty with that approach? In an absolutely awful authority—given the figures relating to Birmingham, it may well be one of them—the eight-week measure may, for example, run at 10 per cent., but a double increase to 20 per cent. within a year would still mean that it is absolutely awful. However, such an authority is given an awful lot more money than an efficient authority that has moved from 80 per cent. to 90 per cent. and that has, in fact, made a supreme gain.
Mr. McNulty: In the round, the increase from 10 to 20 per cent. or from 10 to 30 per cent. will have a far greater impact on the particular local planning authority than a shift from 80 to 85 or 90 per cent. Our difficulty—we are considering this in more detail as years two and three unfold—is what to do with persistently bad performers that do not improve. Once we have some evidence as to how the first year has worked, we must consider how to assist authorities that are bumping along but not improving significantly beyond what by any token is a reasonable but not very good, performance.
Mr. Desmond Swayne (New Forest, West): Are the targets for the number of decisions and for the time
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taken to reach them purely mechanistic, or do they take into account quality of the decision as measured, for example, by how many decisions are overturned at appeal?
Mr. McNulty: In the first instance, some such elements will be captured, because they will be part of the broader best value inspection. To guarantee the allocation of the first tranche of money in time for the coming year, the system is—to be fair—rather mechanistic. However, it is mechanistic in regard to the quantum of performance improvement rather than simply being a tick-box record of how well councils have done. In successive years, it will become more sophisticated and will capture more, not least because one of the reasons for there being a planning delivery grant is that planning departments have been under-resourced for many years, and not merely under the last Government. It is a systemic point, not a political one.
Our wider planning framework changes aim to get planning departments to go beyond the development control sausage factory approach and to plan for a wider brief than development control. In years two and three, we will start seeking to capture those additional elements. The first year might be mechanistic, but it is mechanistic in relation to performance improvement rather than to performance according to tick boxes.