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Housing Act (Licensing)

The Minister for Housing and Planning (Yvette Cooper): The Government are today publishing summary responses on the remaining issues raised in their consultation on the implementation of the licensing provisions in the Housing Act 2004. These cover the licensing of private sector Houses of Multiple Occupation (HMOs) in Part 2 of the Act and the discretionary powers for the Selective Licensing of privately rented properties in areas of low housing demand or significant anti-social behaviour in Part 3 of the Act. This follows on from a statement made by my right hon. Friend the Member for Streatham (Keith Hill) on 6 April 2005 which covered the principal issues arising from the HMO licensing consultation exercise. Copies of these responses have been placed in the Libraries of both Houses.

We are also announcing the Government's intentions on a number of related issues which have been raised by consultees during the period following the end of the formal consultation exercise.

The two consultation papers Licensing in the Private Rented Sector: Consultation on the Implementation of HMO Licensing (published in July 2004) and Licensing in the Private Rented Sector: Consultation on the Implementation of Selective Licensing (published in July 2004) sought to explain the Government's proposals for licensing in the private rented sector. They invited interested parties to comment on how the powers should be implemented, and asked questions about the possible form that the necessary items of secondary legislation should take.

The consultation period for selective licensing ended in October 2004 and for HMO licensing in February 2005. There was a considerable amount of cross-over in these exercises which explains the delay in producing the summary of responses for the selective licensing work. We have now analysed all the responses and reached decisions on most of these issues: this has allowed us to start drafting the appropriate secondary legislation to allow these important measures to be commenced by the late autumn of this year. We also plan to phase the introduction of the enforcement provisions over a period of no more than three months from commencement to allow local authorities' licensing procedures to settle down and to allow landlords sufficient time to make their applications.

On most of the remaining issues covered by the consultation paper, the majority of respondents agreed with the Government's proposals.

The Government are introducing licensing as a measured response to the problems of the private rented sector. They are keen to strike the right balance between setting clear national benchmarks and giving local authorities the discretion to respond to local housing market conditions.

A paper detailing the responses to the consultations and the Governments intentions regarding them has been placed in the Libraries of both House Libraries.
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Planning Policy Statement 9

The Minister for Housing and Planning (Yvette Cooper): The Office of the Deputy Prime Minister expects to publish in August:

The new Planning Policy Statement 9 (PPS9) sets out the Government's planning policies for biodiversity and geological conservation in England. A joint ODPM/DEFRA circular accompanies PPS9 and will provide administrative guidance on the law relating to planning and nature conservation as it applies in England. Together these two documents will replace existing Planning Policy Guidance note 9 on Nature Conservation (PPG9), published in October 1994.

Drafts of PPS9 and the accompanying Circular were issued for public consultation in September 2004. PPS9 has a new emphasis on the need to conserve, enhance and restore biodiversity and makes clear that geological conservation is an important part of protecting our natural heritage. Positive planning which facilitates conservation of biodiversity and geological conservation contributes to the Government's principles for sustainable development set out in the UK Strategy. The policies set out in PPS9, together with the guidance in the circular will enable planning authorities, regional planning bodies and planning inspectors to play their part taking forward the UK Strategy.

It is also our intention to publish, later in the year, good practice guidance to complement the PPS and the circular.

Copies of PPS9 and the accompanying Government circular will be placed in the Library of the House following publication of the documents. They will also be made available on the website of ODPM. A summary of the responses to the consultation drafts has been published on the ODPM web site and copies of the responses will be made available for inspection through the ODPM library.

Local Authority Business Growth Incentives Scheme

The Minister for Local Government (Mr Phil Woolas): I am pleased to announce the final details of the Local Authority Business Growth Incentives scheme (LABGI), which will make its first payment in February 2006. The scheme allows local authorities to retain a share of increased business rates revenue generated in their area. By creating a direct financial incentive for local authorities to encourage business growth in their locality, LABGI provides the opportunity for local government and business to work together to deliver economic success and prosperity to their local community.

In our consultations we have set out five principles for the scheme, which the Government remains committed to:

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Following the announcement of the scheme in the Chancellor's 2002 pre-Budget report, consultations have been held in 2003 and 2004 and volunteer local authorities also took part in a dry-run exercise to test out the administration of the scheme. All responses to the consultations and the experiences from the test exercise have been carefully considered and taken into account in the details of the scheme I am confirming today.

Business growth is measured in terms of the increase in a local authority's rateable value during a calendar year. A single payment will be made to each eligible local authority in the final quarter of the financial year. The scheme operates as an unringfenced grant under Section 31 of the Local Government Act 2003: authorities are free to spend the revenue on their own priorities in their own areas. Administering the scheme in this way was broadly welcomed in the recent consultation.

The starting point for each authority is their rateable value at 31 December 2004. An authority's rateable value figure will not be reduced by successful appeals. Empty and part-empty property reliefs will be netted off, using the most recent set of audited data from the authority's normal National Non Domestic Rates (NNDR) return.

Each authority has a target level of rateable value growth that must be reached to benefit from LABGI—known as the floor. The floor is defined as an authority's baseline growth rate minus a national adjustment factor. Baselines are calculated using a National Historic Growth Model—the preferred model from the first consultation. This has been modified by dividing all the authorities into eight baseline groups based on historical growth rate, rather than seven as previously announced. Feedback from the second consultation highlighted a fairer split was necessary and we have accepted this argument.

The other features of the scheme are the same as the Government set out in the final consultation paper and which received broad support.

There is a national adjustment factor for all baseline groups of 1.4 per cent. At the end of the first year a new list of rateable values will be produced by the Valuation Office Agency, as at 31 December 2005, not including appeals, but net of empty and part-empty property reliefs. This will be compared to the starting list from 31 December 2004 to calculate each local authority's growth rate. Growth above the floor is then multiplied by the business rate multiplier. A scaling factor of 70 per cent. is applied to all revenues above the floor to calculate the final amount eligible locally. Each authority has a ceiling—the maximum revenue that can be kept in any year—with money above the ceiling being passed back to the central business rates pool for distribution between all authorities. An authority's gains in one year in excess of the ceiling will be counted against the following year's target. The ceiling is based on a modified version of part of the Environmental,
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Protective and Cultural Services (EPCS) element of the Formula Spending Share (FSS) from the local authority's Revenue Support Grant calculation.

The ceilings in the first three years of the scheme will be 3 per cent., 6 per cent. and 9 per cent. of modified EPCS FSS, respectively. In two-tier areas, LABGI revenues will be shared out according to each tier's contribution to the total ceiling amount. In London, revenues will remain with the boroughs.

To prevent authorities that fail to gain money in one year having an unrealistic growth target the next year, their floor will be re-based and a new lower floor will be calculated. This will maintain the incentive effect of the scheme for all authorities. Feedback from the recent consultation suggested that re-basing floors was a positive modification to the scheme.

The scheme puts in place the right incentives for local government to work with local business and promote economic growth in its area. This will encourage local government to build effective partnerships with local business, to help deliver increased prosperity and to build long-term economic sustainability for its locality. Local authorities stand to gain up to £1 billion in England and Wales over three years—this is genuinely additional and unringfenced.

The scheme will be reviewed following the first year to test both how it is delivering against the design principles the Government set out and which were agreed in consultation and the level of spend from the scheme.

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