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'(2A) But nothing in these regulations shall enable either the Secretary of State or the local planning authority to raise the quantum of the planning contribution once—
(a) planning permission has been granted;
(b) that permission remains in force; and
(c) any condition relating to planning contribution has been agreed with the applicant.'.

Amendment (c) in line 5, after 'adjustment', insert 'either upwards or downwards'.

Amendment (e), in line 10, leave out subsection (5).

Amendment (f), in line 18, at end insert

'unless the local planning authority certify that the terms of the contribution have been fully met prior to any transfer of title taking place.'.

Amendment (g) in line 22, leave out from 'made' to end of line 23 and insert

'at agreed stages of the development;'.

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Amendment (h), in line 34, at end insert—

'(7A) The Audit Commission will have a specific duty to ensure value for money in any case to which subsection (7) (a) applies.'.

Amendment (i), in line 37, at end insert—

'(7A) The planning contribution referred to in subsection (7) (b) must take into account any additional cost which the developer may be required to undertake at the request of any statutory body. If this occurs after the grant of planning permission the applicant will have the right to ask the local authority to reduce the amount of the contribution.'.

Amendment (k), in line 41, at end add—

'(c) state the grounds on which a local authority will decline to accept an amount agreed under subsection (2).'.

Amendment (j), in line 41, at end add—

'(9) Subsection (8) applies where two or more local planning authorities have prepared joint local development plans under the terms of section 27.

Government new clause 3—Planning contribution: Wales.

Government amendments Nos. 21 to 24.

Keith Hill: I want to begin by describing the contents and purposes of new clauses 1 to 3 and amendments Nos. 21 to 24, and then set out the reasons for introducing these new provisions at this time and deal with some of the concerns that have been expressed about them.

New clauses 1 to 3 and amendments Nos. 21 to 24 will replace sections 106, 106A and 106B of the Town and Country Planning Act 1990, as amended by the Planning and Compensation Act 1991, as the legal basis for planning obligations. It is worth noting that the new clauses use the term "planning contribution" rather than "planning obligation". The effect of the amendments is to pave the way for the new approach to planning obligations that I announced to the House on 6 November 2003 and on which the Government are consulting.

A wide range of interests agree that the current system needs reform because it can be slow, uncertain and opaque. The Government's objectives are therefore to provide greater transparency and certainty for all stakeholders in the development. Our proposals also recognise that the ability to use negotiation to tailor contributions to the circumstances of an individual site is important. We want speed and certainty where possible, and flexibility where necessary.

New clause 1 allows the Secretary of State to make regulations that will enable local planning authorities to provide for and to accept a planning contribution in relation to the development or use of land in its area. We will publish draft regulations to inform debate in the other place, once we have considered the response to our consultation. The clause allows the contributions to be made by the provision of an amount set by the planning authority, known as "the prescribed means"—in the Government's consultation document the prescribed means are described as a new optional planning charge—by a negotiated agreement, known as "the relevant requirements", or by a combination of the two.

The regulations may require the local planning authority to set out in a development plan document, or in another document, the types of developments in

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respect of which they are likely to seek contributions; developments where a contribution by payment of the amount set by a local authority will not be sought; how funds obtained through planning contributions will be used by the local planning authority; and how any contribution will be calculated. The regulations also provide for the developer to state, where a contribution is payable, whether he will pay the amount set by the planning authority or whether he will negotiate. Where the developer has made a contribution by one method, he may not be required to make further contributions relating to the same matters through the other method. The developer will therefore not be required to pay twice.

In some circumstances, a contribution must not be required by the local planning authority. A contribution made by the "prescribed means"—in other words, the charge—may consist of the payment of a sum calculated in line with criteria set by the planning authority in the development plan document or other document prescribed for this purpose or by providing a benefit in kind, again calculated in accordance with the criteria set out in the development plan document, or a combination of these two.

Mr. Geoffrey Clifton-Brown (Cotswold) (Con): The fact that the proposals in the new clauses will be an optional alternative to the present section 106 agreement procedures is a critical point. Will the Minister make it clear that that is the case and confirm that nothing in the regulations will enable him, at any subsequent stage, to withdraw the present section 106 procedure?

Keith Hill: To the first question, I give an unequivocal undertaking that the new proposals will be optional. The developer will have the choice. As for the second question, I must say that however important a statutory provision may be, no statutory provision is for ever. It is impossible for any Minister ever to give the sort of undertaking that the hon. Gentleman appears to be encouraging me to give.

Mr. Clifton-Brown: Of course a Minister cannot bind his successors. I was asking the Minister to give an absolute assurance that the regulations contain nothing that would give him any powers to abolish the present section 106 arrangements.

Keith Hill: There is nothing in these regulations that would give the Secretary of State powers to abolish the section 106 regulations, subject to the provision that I explained about any future decision. We must recognise the realities and remember that single Administrations, never mind succeeding Administrations, may seek to change their minds in certain circumstances.

Where contribution is to be made by a negotiated agreement, the agreement must comply with the relevant requirements, and these will be set out in regulations. It is envisaged that, where the contributor opts not to contribute through the prescribed means, the negotiation will be able to cover all the matters that are currently covered.

New clause 2 sets out the types of matters that regulations providing for planning contributions may contain. Those include specifying the maximum and

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minimum amounts a planning authority may set as a planning contribution made by the prescribed means, and allowing for periodic adjustment of the criteria for determining the value of planning contributions by the prescribed means—for example, the periodic adjustment could be based on the retail prices index, which would avoid the need for planning authorities to constantly change their documents setting out the planning contribution in order to ensure that the amounts retain their value. The regulations may also require planning authorities to publish an annual report, which could contain information on matters such as how the planning contributions have been implemented, the amounts obtained, and how contributions paid have been used.

4.30 pm

Sir Paul Beresford (Mole Valley) (Con): The Minister said that he was looking for clarity and I agree that the section 106 system should be adjusted. However, a section 106 system will remain, with new tariffs introduced as an option, and it is not clear whether the choice will be made by the applicant or the local authority. There will be methods to vary or change the system according to the type of development that is requested, depending on the land and so on. Now the Minister tells us that under new clause 2 there could be adjustments in the value of the tariff. That sounds like a much more complicated procedure than the previous one, which was adjustable.

Keith Hill: The procedure is really not as complicated as the hon. Gentleman imagines. The developer will face a simple choice: to pay a charge set by the local planning authority, after a public consultation in relation to the character of the site or development; or to undertake a traditional section 106 negotiation. That is a simple and straightforward arrangement. Furthermore, where there is a charge, rather than the local planning authority having to be involved in an elaborate procedure for recalculating the charge, in the light of changing costs, it is suggested—it is merely a suggestion at this point; there is a consultation process—that one means of ensuring that such a periodic adjustment could occur would be to base it on the retail prices index.

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