Examination of Witnesses (Questions 180-199)
MS BRIGID
SIMMONDS
8 MAY 2006
Q180 Mr Betts: Welcome and thank you
for attending our session. Can I begin, as I did before, by giving
apologies for Dr Phyllis Starkey, Chair of the Committee, who
is in her constituency on important business this afternoon. Would
you for the sake of our record like to introduce yourself?
Ms Simmonds: Thank you, Chair.
My name is Brigid Simmonds. I am the Chief Executive of Business
in Sport and Leisure, which is an umbrella organisation for sport,
leisure and hospitality companies. I would also like to give evidence
on behalf of the Tourism Alliance of which I am Chairman, which
represents 46 different trade associations, very much the voice
of tourism, and I am also Chairman of the CCPR, which represents
270 voluntary bodies and governing bodies of sport.
Q181 Mr Betts: You wear a number
of hats. If we restrict PGS in any way on commercial-type developments
is that not going to skew the market? If PGS is charged, say,
on housing developments would that not be more fair?
Ms Simmonds: Our concern is the
opposite, particularly if you are going to give the PGS to local
authorities to distribute, that local authorities are only going
to be interested in receiving planning applications from those
types of development which produce high value and that is everything
other than sport and leisure. There is not a value in sport and
leisure types of development. They struggle to pay the site costs
you would spend on retail, commercial or offices, and that is
our main concern, that you would be further restricting a market
that already suffers from the fact that very few local authorities
think about it when they are putting together local development
frameworks and regional spatial strategies.
Q182 John Cummings: Why do you believe
that PGS is inherently more complicated for commercial sites than
for residential sites?
Ms Simmonds: I do not think it
is inherently more complicated, although I have various reservations
about how the scheme would work. Our concerns are mainly to do
with the fact that you have to recognise where that value lies.
Most of the things that I represent are things that should be
provided for the community anyway. BISL has given evidence twice
to ODPM when they have been considering their planning guidance
on housing. Both times they failed to put into that guidance the
requirement for the sorts of facilities in leisure or in sport
which are needed by people if they are going to have new housing
development. You need a community pub, you need a sports centre,
and whilst section 106 agreements have worked in some places very
well they have been patchy. You need those types of development
and there needs to be leadership from the top to ensure that happens.
Q183 John Cummings: If a distinction
has to be made between residential and non-residential development
for PGS assessment, how should the Government deal with mixed-use
sites?
Ms Simmonds: Kate Barker only
recommended that this planning gain supplement applied to housing,
so I think that is the starting point, and I think it is obvious
that there is a planning gain uplift when you develop a housing
site. That planning gain uplift is not so obvious when you come
to leisure or some other forms of commercial development. We would
prefer to stick with the section 106 agreements which we already
have. If I could give you some examples, particularly where it
has worked well for sports, in Catterick on a £196,000 project
for new pitches and for drainage section 106 contributed £38,000.
In Sandy Town, that place on the A1 that you come to in Bedfordshire,
again for drainage and changing rooms, the total project cost
£800,000 and £250,000 came from section 106 agreements.
We believe that we would be better off keeping the section 106
agreements. The alternative, if you keep planning gain, is that
you have a system specifically for sports-based projects where
part of that distribution is mandatorily providing sports facilities.
Q184 John Cummings: Do you have any
suggestions or ideas for how the Government should deal with mixed-use
sites?
Ms Simmonds: If the planning gain
supplement only worked for housing and it was a mixed-use site
then obviously it would not apply to other forms of development
within it. I agree with the previous witnesses that if you have
a phased development you should only be paying your planning gain
supplement as the various phases continue. A further complication
is how you value those sites. A lot of sites are bought with hope
value in mind. Are they going to have the planning gain supplement
based on the value they bought it for or the current value which
is assessed by somebody when they come to develop the site? The
alternative for us is that either you only apply planning gain
supplement to housing or you apply it to the rest of the scheme
but have something that specifically encourages sport and leisure
development.
Q185 John Pugh: You argue, and we
had some difficulty in following the point here, that leisure
developments do not generate the same revenue as retail and housing
developments and "cannot afford to pay high prices for site
development", but is that kind of disparity not taken into
account in the way the PGS is calculated in the first place? In
other words, if the land uplift is greater then so is the PGS
liability. I do not see how it makes any difference.
Ms Simmonds: It only makes the
difference because the sorts of development we are talking about
you want to encourage and if PGS acts as a disincentive then there
will not be any encouragement for those facilities to be provided
in the first place.
Q186 John Pugh: But why would it
act as a disincentive?
Ms Simmonds: Because it does not
provide the value and therefore the local authority is not going
to receive the sort of value that it requires in order to do the
rest of its infrastructure developments.
Q187 John Pugh: I see; so it is going
to alter the behaviour of local authorities in terms of what they
will allow to be developed or not?
Ms Simmonds: Yes.
Q188 John Pugh: Why particularly
should they do that, because after all local authorities have
a lot of interest in providing leisure facilities for their communities
because they are the voters, they are the constituents, they are
the people who turn out at elections and so on, whereas housing
is often for people who are not currently part of that community?
Ms Simmonds: One reason is that
there is no evidence at the moment that local authorities do provide,
particularly at planning officer level or in local development
frameworks, planning guidance which is specific to leisure developments.
In fact, I mention in my evidence that I hope later this month
ODPM will be publishing their good practice guide—
Q189 John Pugh: That in a sense is
a separate point. Under the current section 106 agreements local
authorities make far more from giving the go-ahead to a supermarket
or a housing development than they will for allowing leisure development.
I do not see why PGS would change that in any way because local
authorities at the moment get more money out of allowing those
sorts of developments and yet do go ahead in allowing, presumably,
a fair number of leisure and community developments as well.
Ms Simmonds: They do, but in our
view they do not provide enough. Many pubs provide CCTV for town
centres all over the place under section 106 agreements. I think
the scheme has been given more certainty over the last few years.
There have been two reviews of section 106 agreements. I think
the scheme works very well, so why do we need to introduce a further
scheme which can only be seen as a tax on development?
Q190 John Pugh: But if your thinking
is correct and local authorities have an opportunity to acquire
funds which possibly they cannot at the moment, would not the
average local authority, looking at local authority expenditure
currently on leisure, which is by their own acknowledgement fairly
low, want precisely those sorts of funds to put back into community
provision and leisure facilities, not necessarily private facilities
but nonetheless good public leisure facilities?
Ms Simmonds: The South West Regional
Sports Board three years ago put out a policy that they would
only fund certain local authorities if they put section 106 agreement
funding into sport. I telephoned them this morning and they agreed
that it has had almost no effect at all on their local authorities.
Some local authorities are very good. maybe the top 30%, but an
awful lot of local authorities do not see it as a priority, and
I think particularly where we have a situation such as now where
it is a government objective to increase participation in healthy
activity by 1% a year, and in fact it is even a target for both
the Departments of Health and Education, there is a concern about
how sport and leisure fit into it. If you look at page 27 of the
consultation draft it actually suggests that leisure facilities
will be outside the remit of planning gain supplement and if that
were the case maybe we would not need to have this conversation.
What is perhaps stark in this is that there is no mention of sport
at all one way or the other. It may be that there was a consideration
that it was included within leisure facilities but otherwise if
you have no exemption to this there are going to be in many cases
taxing developments that are funded by the National Lottery, or
are funded out of the public purse.
Q191 John Pugh: Is a fair way of
summing up what you are saying that there are some authorities
who are authorities who are virtuous, who give priority to leisure,
use section 106 agreements and planning gain if they get it for
the right causes, in order to provide community and leisure facilities,
and there are other local authorities who are profiteering, if
you like, and will try to get what gain they can wherever they
can and will give priority to retail and housing? Given that point,
are you saying that the new regime will accentuate or encourage
the bad authorities to be worse, if I can put it like that, and
the virtuous authorities to cease to be so virtuous?
Ms Simmonds: Yes, absolutely.
Q192 Mr Betts: Sport England apparently
have argued that the public sector and not-for-profit organisations
might well be exempt from planning gain supplement but you seem
to be going an awful lot further and arguing for some quite significant
businesses. My understanding is that your organisation represents
businesses with around £40 billion of capital. Is that not
special pleading?
Ms Simmonds: Can I differentiate
between some leisure facilities, like hotels, for example, which
probably would be included within your planning gain supplement
and the other end of the scale, dare I say it, with health and
fitness facilities particularly with sport, which are very much
needed. It is my belief that we should not be taxing people who
are providing what I would call and like to define as "active
leisure" facilities. If you were going for an exemption you
would exempt all facilities which are providing "active leisure",
whether they be private sector, voluntary sector or, indeed, community
amateur sports clubs, so they would not have to pay this planning
gain supplement. It is hugely difficult and we are already seeing
some of our members developing abroad because they find it so
difficult to get planning permission in this country. There are
various complications in the way that particularly ODPM sees health
and fitness which exacerbates that problem within PPS6. This is
not a sector that is often thought about either nationally in
terms of planning—I am talking specifically here about planning—or,
indeed, locally by the local planning officer. In a sense, we
are arguing for some better guidance here which we are about to
have, for tourism, because ODPM recognises the problem.
Q193 Mr Betts: The exemption level
could still apply to some quite profitable large companies.
Ms Simmonds: If you had an exemption
for active leisure. The alternative would be to define it just
for community amateur sports clubs which, as you know, are defined
by the Treasury. There are just over 4,000 of them at the moment
and the Government is keen for more clubs to become community
amateur sports clubs. You could define it as not-for-profit organisations
and that would run across the cultural sphere. You could define
it as anyone who is in receipt of a National Lottery grant because
the rules around that on not-for-profit could be exempted from
this scheme. I do have a concern that you do have people who own
facilities which have no economic use but want to bring them back
into economic use. If they keep that ownership should they pay
a planning gain supplement? Yes, there will be an uplift, maybe
a small uplift, and therefore the tax will be small, but it may
mean those types of developments never come forward in the future.
If I can give you the example of the Docklands in Portsmouth where
they have a whole series of buildings which are unusable: if the
Docklands Trust wanted to bring it back into economic use, would
they find the planning gain supplement as a real barrier to that
type of development going forward? There are lots of non-profit
making organisations who would have the same problem.
Q194 John Cummings: What other mechanisms,
other than exemption from PGS, could be used to encourage local
authorities to identify sites for leisure development? Why is
exemption from PGS your preferred method?
Ms Simmonds: I think the exemption
from PGS may not necessarily be the preferred method if you then
had some funds coming out of the other end for actually funding
those sorts of things which would not naturally get funded otherwise.
I do believe that maybe it is time for some good practice national
guidance from ODPM to encourage local authorities to put together
sites particularly for sport. I do think that it is important
where we have housing developments and we have section 106, and
I think there is a danger they may disappear over a period of
time for sporting developments, that that mechanism is somehow
kept. If I could give you another example of the Harrods Repository
which was developed in West London: this part of the section 106
improved dramatically the towpath that runs along from Putney
to Hammersmith and is very well used for recreational use. Our
concern is if section 106 is only concerned with things that are
actually around the site and if the local authority does not identify
that scheme as something they want to put the supplement towards
then it will lose out. I think local authorities would be more
interested in putting together funding for something that was
infrastructure based but not perhaps as good for its local community.
Q195 John Cummings: Is your organisation
contacted on a regular basis by respective government departments
to seek your advice on such matters?
Ms Simmonds: Yes, it certainly
is by ODPM. We have tried very hard, particularly through the
Tourism Alliance where we wrote to every authority that was putting
together a Regional Spatial Strategy and asked them to contact
us and, in fact, we had absolutely no response at all. In the
past Whitbread have tried to talk to every local authority where
they wanted to develop sites for their David Lloyd leisure centres.
It is very difficult for national organisations or, indeed, individual
companies to fit in and make contributions to Local Development
Frameworks.
Q196 John Cummings: Would including
community sports facilities in Local Development Frameworks adequately
mitigate against the risk of local authorities no longer prioritising
such developments?
Ms Simmonds: Local Development
Frameworks are quite different from local plans and they are not
as site specific as they used to be, they are much more about
general policies. The whole idea was that the system would become
more flexible and it would also be faster. In many ways we lost
the ability for local authorities in their Local Development Frameworks
to give that sort of advice and to be very site specific.
Q197 John Cummings: Are you saying
it does mitigate or it does not mitigate?
Ms Simmonds: I think some guidance
could make it easier but I do not see any evidence from the way
the system is evolving at the moment that it would.
Q198 John Cummings: Would an inability
to provide community sporting facilities under section 106 arrangements
jeopardise planning permissions for other developments?
Ms Simmonds: Specifically, since
this is very much about housing, if you are going to put in new
houses for people to live they must have adequate sport and leisure
developments to go with them otherwise you are not providing for
the fabric of people's lives and you are just encouraging people
to spend all their leisure time at home, which is neither good
for them nor for our economy.
John Cummings: Thank you.
Q199 Mr Betts: If you consider the
planning gain supplement, surely local politicians are still going
to be under pressure when they grant planning permission for developments
to use the planning gain supplement money they receive for exactly
the purpose, ie providing community sports facilities, that they
would have used section 106?
Ms Simmonds: It is not our view,
or our experience of section 106, that that is the case. There
are too many local authorities who never think along those sorts
of lines at all. There is an urgent need for more cycleways and
more walkways within local authorities. As an Olympic legacy we
should be thinking along those lines throughout the country now.
There is no evidence that many local authorities do think along
those lines. Many of them think of things which may be hugely
necessary for the infrastructure in that particular area and also
possibly that do not cost as much to maintain, because there is
a maintenance and revenue issue here as well.
| 
