Local Government Finance (England) Special Grant Report (No. 117) (HC 537) Driving Local Authority Planning Performance 2003-04

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Mr. Davey: I thank the Minister for his reply to the hon. Member for New Forest, West (Mr. Swayne). Can he tell us more? Is it mechanistic in relation to quality as well as to quantity? Does it apply only to the number of applications determined or do the indicators and targets contain any quality measurement?

Mr. McNulty: The best value development control targets, which are in place as a matter of routine, cover that point. There have been discussions with some authorities, not least those in large urban areas where one or two significant planning applications can skew their performance. I am sure that the hon. Gentleman can think of some applications in London that, considered on their own, would skew things. There are some qualitative elements, which is partly a reflection of the fact that they relate to the quantum of performance improvement rather than merely to tick boxes. That is not as sophisticated or as non-mechanistic as it should be, but the impetus should surely be to get the first year's grant out, to see how that works and to adjust criteria accordingly in the two subsequent years. That is what we are trying to do. There is a mixture of the qualitative and the quantitative. Although, on balance, the system is probably more quantitative than qualitative, given that it is underpinned by performance improvement rather than by performance per se, it is appropriate for the first year. It is not only a question of the speed of decision making; there are other quality dimensions.

Sir Paul Beresford: Does the Minister not realise that that leaves local authorities in a difficult position? They are receiving grants this year, and a bigger pool of money is promised for next year and the year after. However, halfway through the year, he will alter the

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criteria so that local authorities are working towards an end that is not there.

Mr. McNulty: No, they are working towards an end that—at least, in broad principles—is clearly identified. They can read the planning reform agenda, the Planning and Compulsory Purchase Bill and all the other elements as readily as I can. The hon. Gentleman would be right had we set out in year one a series of criteria that were rooted in that Bill and a range of other things that are part of the reform agenda that authorities clearly could not meet. That is why, as the hon. Member for New Forest, West suggests, the system is slightly mechanistic in year one. However, there will be consultation. We shall tell local planning authorities at the earliest opportunity what the criteria will be for subsequent years and they will know where the goalposts will be if they are moved. This is about overall improvement of planning authorities' performance.

We have treated the authorities that consistently meet our targets differently. Because they are doing what we want all authorities to do, we have given them a simple allocation in proportion to the share of national decisions that they make. As more authorities reach these targets, we shall consider whether to provide an incentive in this part of the grant scheme to move them beyond their targets.

The last element of the grant is a reward for authorities that met any of the development control targets in June 2002. They will get a reward of up to £100,000 if they met all three targets. Year one is therefore about securing the performance baseline on which we shall build in subsequent years.

To return to the comments of the hon. Member for Mole Valley (Sir Paul Beresford), a minimum allocation of £75,000 will be made to all local planning authorities in 2003–04 to kick-start improvement. Where allocations, or target rewards or both are less then £75,000, they will be topped up to that sum, so that no one will get less than £75,000.

For the Committee's information, I should add that we are proceeding on an identical basis in making grant allocations for 2003–04 to national park authorities and the Broads Authority in respect of their development control functions.

The grant allocations to local planning authorities have been enhanced in areas of high housing demand and in growth areas in recognition of the additional pressure that they face in meeting the high-demand objectives of the sustainable communities plan. In areas of high housing demand in London and south-east England, we are giving an extra allocation to authorities that make a significant commitment to providing extra housing in proportion to the number of units being provided. We have also made capacity-building allocations in relation to the size of authorities in the growth areas of south-east England.

Regional chambers, as regional planning bodies, are also being paid grant to review regional planning guidance and, subject to the Planning and Compulsory Purchase Bill receiving Royal Assent, to produce new

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regional spatial strategies. We expect that regional planning bodies will draw on the expertise and experience of the counties, and this money will enable them to engage the counties on an agency basis. Similarly, the Greater London Authority will receive £75,000 to assist with housing and growth area delivery under the London plan.

We hope that the grant delivers the performance improvement that is needed to achieve a more efficient and effective planning service. We are considering how we can further develop and widen the criteria for grant allocation next year, and we shall be in a position to announce them shortly.

One element of next year's regime that I can reveal today, however, is that we intend to change the period over which performance will be assessed. Many local authorities felt that the period for this year—July 2001 to June 2002—was a bit tight and that it was not sufficient to roll the same procedure over when they had just been paid the money. For 2004, therefore, we shall look at the data from October 2002 to September 2003 so that there is at least a chance that what authorities are doing with the grant has bedded in. The allocations in 2004–05 will therefore more closely reflect the pattern of performance improvement at the start of that year, and authorities will have longer to qualify for grant on the basis of the general criteria.

For those reasons, and with the caveats about the two errors that I mentioned, I happily commend the report to the Committee.

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Mr. Swayne: I thank the Minister for his exposition. I have one or two questions for him. Page 3 of the report sets out the purpose of the grant, which is

    ''to provide support to receiving authorities in England in recognition of their work towards the objective of completing their local development frameworks''.

Will the Minister tell us about the genesis of local development frameworks? Is not the concept largely set out in and confined to the Planning and Compulsory Purchase Bill, which has yet to reach Report? Is it not therefore somewhat premature to use it as the main guideline for allocating grant? If it is in order to do so, perhaps he can tell us in passing what has become of the said Bill.

The sentence on page 3 also refers to local authorities' objective of

    ''performing at or above best value targets for development control.''

The Minister helpfully explained that every authority gets £75,000 for this financial year. Furthermore, those that meet the performance targets receive additional amounts. Is the performance target in question largely, or perhaps exclusively, confined to best value target 109, namely, the time that it takes to consider the various types of applications? If so, what of other important indicators, such as best value target 106, which is the amount of brownfield land being used? That is a key target, and performance should therefore be measured against it. If performance is not measured against that this year, will it be measured against it next year?

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Paragraph 2 of annexe B is headed ''High housing demand'' and states:

    ''£6 million of the grant is used to support authorities in areas of high housing demand.''

However, the annexe does not say which those authorities are. Can the Minister tell us which they are or, at least, place the list in the Library if he does not have it with him this afternoon? Some £1.5 million of the £6 million is

    ''allocated to authorities within the growth areas set out in 'Sustainable Communities: Building for the Future'''.

Does multiplying £1.5 million by the number of planning authorities that receive the grant—the Minister will say how many there are—account for the £73 million that ''Sustainable Communities: Building for the Future'' allocates for the financial year 2003–4 or is there another tranche still to come?

What estimate has been made of the transition costs from the current planning system to that envisaged under the Planning and Compulsory Purchase Bill? Does the grant in any way defray such expenses as those for redundancies in county council planning departments, and so on?

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Mr. Edward Davey: There is much to be welcomed in this special grant report, not least the fact that the Government are providing some non-ring-fenced cash in relation to planning. That is appropriate in principle. We need to improve the planning system, speed up things and get better planning decisions, and finance is part of that. Many of us were concerned when the Government announced that the £350 million for the planning system would be ring-fenced and that central Government would direct it in every which way. However, although the Government's system appears to be mechanistic, it goes along the right lines by rewarding performance and ensuring that local authorities receive money in relation to their planning performance. That is a welcome start in spending that £350 million.

The report should be considered in the context of years two and three. What are the lessons to be learned and which early lessons have been learned? It is the Committee's job to scrutinise Government thinking on that.

Systemic concerns about the grant were expressed to the Minister in another debate. Things seem to be broadly on the right track, but as the hon. Member for Mole Valley said, what about those local authorities that perform poorly and need assistance? The most important point is for such an authority to get to grips with that poor performance and for its councillor and officer leadership to recognise the problem and to try to do something about it locally.

However, we need to know what the Government are doing to improve performance, either through the Local Government Association or through the Improvement and Development Agency and other bodies. That should take place not necessarily by way of grants, but in other ways, so that not so many planning authorities receive the minimum grant.

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It is disturbing to see from the report how many planning authorities are receiving only £75,000. I have not counted them myself, but the number is certainly in the tens or twenties. Although it is right to have an incentive that is not perverse—one that rewards success and good performance—we still need to think about how to ensure that poorer performing authorities have some way of moving off the bottom. I wonder whether the Minister has any thoughts about how that might be achieved in years two and three.

My second point about the system's design draws on our earlier exchanges about quality. I have spoken to district councillors in several areas who used to spend a lot of time on, and gave much consideration to, planning applications. They used to make site visits and much councillor and officer time was put into getting things right. Such an approach was often well regarded by the applicants and developers involved, because real input and engagement produced a better result for everyone concerned. Many of those district councillors are saying, ''Well, the Government have put up this performance regime and tied grant to it, so we are reducing quality, site visits and the amount of time we put in. We are allowing officers to delegate more decisions, we are hitting Government targets, improving our performance, meeting all the best value 109 targets and getting the money. But that does not necessarily result in better planning.''

I prefaced my remarks by saying that we need a system that gets the grant to local authorities without it being ring-fenced. However, the question is whether we have found the optimum way of doing that. I do not believe that we have, because the system pays insufficient regard to quality. I do not pretend that it is easy, but when the Government come back to the House in years two and three, they need to show that they have put more thought into ensuring that quality is included at the base of the system. The sooner they do that, the better. As the hon. Member for Mole Valley said, local authorities and planning departments are trying to smell the coffee—to see which way the wind is blowing from the Office of the Deputy Prime Minister—and they need some early indications of how they can improve quality as well as turnover.

I should also be interested to know whether it is the Government's intention that the rest of the £350 million should be spent in similar ways in years two and three. There may need to be some tweaks to the criteria, but are there any plans to promote best practice through spending this money? Are there any plans to deal with some of the core problems in the planning system, such as the lack of planners? We will not necessarily solve the problem by giving the money directly to local authorities, but we may improve the supply of planners by using this money outside.

It might be beyond the scope of our debate, but it would be interesting to know whether the Minister has any plans to help those universities, colleges and institutes that are involved in improving planning and in trying to increase the supply of planners to local authorities as a family. That is important, because local authorities cannot do that by themselves. Are there any plans, for example, to promote best practice

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in the use of the internet for planning? Planning is one of those local government responsibilities for which e-government can be an effective tool. Planning is a document-intensive business and a plan-and-text-intensive business. The system can be made more open, accessible and efficient if the internet is used effectively in planning. That can be done through better practice and through pilots. I hope that the Government are thinking along those lines.

Will the Government tell us what consultation they have had with the Local Government Association and with the Town and Country Planning Association to see whether the grant mechanism can be improved? It is important that the Office of the Deputy Prime Minister engages with local government associations to ensure that we get a better system for spending large sums of money.

We will learn from this year's experience, and I am sure that the special grant report for next year will not contain similar misprints. I hope that we can learn deeper lessons as well. The Committee should not vote against the report, as it is a step in the right direction. However, many lessons must be learned, and I hope that the Minister will share his thoughts on them with the Committee.

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