Clause
166
Amount
Mrs.
Lait:
I beg to move amendment No. 597, in
clause 166, page 94, line 10, leave
out ‘determining the amount of CIL’ and insert
‘local planning authorities to
determine the amount of CIL as part of their local development plan
process.’.
The
Chairman:
With this it will be convenient to discuss the
following: Government amendments Nos. 545 to
548.
Amendment No.
588, in clause 166, page 94, line 20, after
‘descriptions’, insert ‘,
locality’.
Government
amendments Nos. 549, 38 and
551.
Amendment No.
599, in clause 166, page 94, line 27, leave out paragraph
(d).
Government
amendments Nos. 552 to
554.
Amendment No.
600, in clause 166, page 94, line 30, leave out subsection
(5).
Government
amendments Nos. 555 and
559.
Mrs.
Lait:
There is nothing like being defeatist, but we are
unlikely to get very far with this issue. However, we believe that
local authorities should set the amount for the infrastructure levy,
not the Government. We are considerably concerned about how flexible it
will be. We have tabled that proposal in the
amendment.
I see from
Government amendment No. 38 that the Minister and I are of one mind,
technically, although I suspect that we are coming at the issue from
different angles. I am therefore very interested to hear what his view
is. We are looking to take out the references to land value, as part of
our continuing campaign to ensure that the planning gain supplement
cannot be brought back in any way, shape or form. I cannot imagine that
the Minister will use that
argument.
Amendment
No. 600 would ensure that there is a right of appeal against the CIL.
Currently, that can be done through the planning appeals system and we
would like to hear whether the Government are prepared to incorporate
an appeals system that is part of a well-known process, such as the
planning appeals process. This point was put to us quite forcibly by
the Home Builders Federation, and I am sure that the Minister has also
heard its arguments. That is somewhat ironic because the Home Builders
Federation is one of the
organisations that succeeded in persuading the Government to go down
this route. If the Minister would clarify that point, I would be
grateful. 2.30
pm
Mr.
Betts:
I want to raise two issues: first, land values,
which is of great concern to me. There has rightly been a lot of
discussion in Committee of the fact that we have not received the
detail of the regulations, which will eventually determine whether, and
how well, CIL works.
In our very useful evidence
sessions we heard from a range of different organisations that will
ultimately be involved in the levy implementation: the British Property
Federation, the Home Builders Federation and the CBI, which represent
those who will have to pay it; and organisations such as the Royal Town
Planning Institute, whose members are likely to be involved in its
calculation and collection. One thread of concern that ran throughout
those sessions was the issue of valuation.
When the
Select Committee considered the planning gain supplement some time ago,
there was support for a mechanism to collect some of the private gain
that results from planning permission being given. But virtually every
organisation that gave evidence expressed concern about how it would
operate, especially on the issue of valuation. Both the evidence given
to the Select Committee and the Committee’s report reflected
genuine concern about how the calculations would be done. The Committee
considered the options that had existed on land in the past and how
they would affect the calculations, but no one had an answer to how to
deal with the
issue.
When the
proposals were introduced, the Minister said that we would proceed with
them, but that if someone had a better idea they could come forward
with it. Some organisations got together and suggested a planning
charge, which has become the community infrastructure levy. What drove
them was the wish to get away from trying to calculate increases in
value as a result of planning permission being granted on particular
sites.
I am not a
valuer and I do not understand some of the complex issues that were
raised in the Select Committee, but what clearly emerged from the
evidence was that everyone was worried that the levy would become as
complicated as the planning gain supplement if the issue of value
remained. The intention of all those who proposed an alternative to the
planning gain supplement was to get away from the issue of value. Will
my hon. Friend the Minister therefore explain why it was essential to
include value when so many other variables can be used to determine a
levy at local level, although I agree that that can be done differently
by different authorities to reflect the needs of their areas in
different ways?
My second
point is about locality, which may be covered by a Government
amendment. Another point that emerged in evidence was that what might
be appropriate in trying to raise a levy in one part of a local
authority area—for example, an affluent suburb where there is a
new housing development—might be a very different matter in,
say, a housing market renewal area. The local authority might try to
encourage developers into a renewal area with a view to uplifting the
general value
of housing, and it might be inappropriate to levy such developers at the
same level as those in a more affluent area. A local authority needs to
be able to vary the levy according to the locality in which the
development takes place. Government amendment No. 549, which
will “permit or require
charging schedules to operate by reference to the nature or existing
use of the place”
would
allow that variation between different areas where development might
take place. Could my hon. Friend reassure me that that variability
between developments in very different areas will be possible under his
proposals?
John
Healey:
On the question of value, to which we keep
returning, I am clear, as is the industry, that viability is a central
concern when setting the community infrastructure levy. It is a central
feature in the design of the system and has to be if we are concerned
that a levy might choke off development rather than support it.
Industry representatives and others, from the British Property
Federation to major developers, have told us what we believe to be the
case: that it is important to have some reference to value, and
therefore viability, in the Bill, and it is hard to see how any
assessment of viability can take place without some reference and
consideration to land value.
We are in discussion with the
industry about whether a more appropriate indicator or a better
proxy—my hon. Friend referred to this—could be used for
the value that is created by development. As things stand, however, we
believe that it needs to be an element of the design of a charging
structure. For it to be capable of being taken into account, it needs
to be referred to, and that is why I continue to encourage members of
the Committee not to accept amendments that would knock it off the face
of the
Bill.
In
addition to infrastructure planning, local authorities will need to
produce a draft charging schedule that sets out the rate, and perhaps
also the formula, for determining how the levy might be calculated in
their area. To answer my hon. Friend’s second point, it is
conceivable, in the terms that we intend the levy, that if the
infrastructure requirements of different areas within the same local
authority boundaries require and justify a different levy charge, that
could be incorporated and reflected in the charging schedule.
We have also made it clear that
the process of setting charges should ideally be embedded within the
development plan process, which is something that we will look to do
and that my hon. Friend is keen on. However, the process for setting
the community infrastructure levy must at the same time also be
flexible enough to respond to changing market conditions. While we are
clear that there needs to be a thorough and proper expert testing of
the charging schedule, I am keen to avoid a situation in which further
delays could be caused to local authorities bringing their development
plans up to date.
There is still a question that
we need to settle: whether incorporating the development of the
charging schedule entirely and solely within the development plan
process might be too slow and unresponsive to allow us to design it in
the way that we want. We are
clear, however, that it has to be plan-led and based on an
infrastructure plan, and that devising a charging schedule is the way
in which we will avoid one of the principal pitfalls that people saw in
the planning gain supplement, which is site-by-site valuations with all
the complexities and some of the uncertainties that would come as a
result. I hope that
amendment No. 600 is also a probing amendment, as it would remove the
requirement for regulations to provide an appeal mechanism on matters
of fact against the calculation of the levy in individual cases. We
intend the provision that the amendment would otherwise compromise to
be a safeguard for resolving factual disputes about the basis of
charging CIL in an individual case. For instance, it might be that the
charge is calculated by reference to the square meterage of different
uses in a development proposal, and there could be a disagreement
between the developer and the local authority about the quantum of that
square meterage. Otherwis,e judicial review would be the only means to
resolve a dispute that was based on facts about the correct level to
pay. I hope that those comments are
helpful.
Mrs.
Lait:
The amendment was probing because, frankly,
unless there is a little more detail for us to debate, it is difficult
to get sufficient information from the Government. The more we can
extract from them, the easier it will be. We will consider their
response and will probably return to it at a later stage. I beg to ask
leave to withdraw the
amendment.
Amendment,
by leave, withdrawn.
Amendments made: No.
545, in clause 166, page 94, line 16, at end insert
‘(which may include provision for
consultation, for the appointment of an independent person or a
combination).’.
No.
546, in
clause 166, page 94, line 16, at
end insert—
‘(2A) The
regulations may permit or require charging authorities, in setting or
revising rates or other
criteria—
(a) to have
regard, to the extent and in the manner specified by the regulations,
to actual or expected costs of infrastructure (whether by reference to
lists prepared by virtue of section 167(3)(a) or
otherwise);
(b) to have regard,
to the extent and in the manner specified by the regulations, to actual
or expected increase in value arising from planning permission
(calculated in accordance with the
regulations);
(c) to have
regard, to the extent and in the manner specified by the regulations,
to actual or expected administrative expenses in connection with
CIL;
(d) to have regard, to the
extent and in the manner specified by the regulations, to values used
or documents produced for other statutory
purposes;
(e) to integrate the
process, to the extent and in the manner specified by the regulations,
with processes undertaken for other statutory
purposes;
(f) to present the
rates or other criteria in the form of a document (a “charging
schedule”);
(g) to
produce charging schedules having effect in relation to specified
periods (subject to
revision).’.
No.
547, in
clause 166, page 94, line 17, leave
out ‘authorities’ and insert
‘schedules’.
No.
548, in
clause 166, page 94, line 20, leave
out ‘calculation’ and insert ‘charging schedules
to operate’.
No. 549, in
clause 166, page 94, line 21, at
end insert—
‘(aa) permit or
require charging schedules to operate by reference to any measurement
of the amount or nature of development (whether by reference to
measurements of floor space, to numbers or intended uses of buildings,
to numbers or intended uses of units within buildings, to allocation of
space within buildings or units, to values or expected values or in any
other way);
(ab) permit or
require charging schedules to operate by reference to the nature or
existing use of the place where development is
undertaken;’.
No.
38, in clause 166, page 94, leave out lines
22 to 24.
No. 551, in
clause 166, page 94, line 25, leave
out ‘refer to, or permit,’ and insert
‘permit or require charging
schedules to operate
by’.
No. 552,
in
clause 166, page 94, line 27, leave
out ‘refer to, or permit,’ and insert
‘permit or require charging
schedules to operate
by’.
No. 553,
in
clause 166, page 94, line 27, after
‘used’, insert ‘or documents
produced’.
No.
554, in
clause 166, page 94, line 29, after
‘permit’, insert ‘or
require’.
No.
555, in
clause 166, page 94, line 31, at
end insert—
‘(6) In this
section a reference to publication includes a reference to making
available for inspection.’.—[John
Healey.]
Clause
166, as amended, ordered to stand part of the
Bill.
Clause
167
Application
2.45
pm
John
Healey:
I beg to move amendment No. 556, in
clause 167, page 94, line 34, at
end insert—
‘(1A) In
subsection (1) “infrastructure”
includes—
(a) roads and
other transport facilities,
(b)
flood defences,
(c) schools and
other educational
facilities,
(d) medical
facilities,
(e) sporting and
recreational facilities,
(f)
open spaces, and
(g) affordable
housing (being social housing within the meaning of Part 2 of the
Housing and Regeneration Act 2008 and such other housing as CIL
regulations may specify).
(1B)
The regulations may amend subsection (1A) so as
to—
(a) add, remove or
vary an entry in the list of matters included within the meaning of
“infrastructure”;
(b)
list matters excluded from the meaning of
“infrastructure”.’.
The
Chairman:
With this it will be convenient to discuss the
following: Amendment No. 443, in
clause 167, page 94, line 35, after
‘specify’, insert ‘that charging authorities are
to
determine’.
Government
amendments Nos. 557 and 558.
John
Healey:
The amendment sets out the types of infrastructure
for which CIL could be used. The list includes items of infrastructure
that are currently commonly secured through planning obligations. The
list is intended to be illustrative, rather than exclusive or
exhaustive. It includes items over which some doubts have been raised,
such as “open
spaces”.
Hon.
Members will note that the list includes affordable housing. To be
clear, our intention and preference is that affordable housing should
continue to be delivered on-site through negotiated section 106
agreements, which have proved successful in many areas in ensuring that
we secure mixed communities in important developments. However, the
Campaign to Protect Rural England and other bodies have expressed the
concern—indeed, the CPRE expressed it in its evidence to the
Committee—that the community infrastructure levy should not lead
to a reduction in the provision of affordable housing. While we do not
initially intend to include affordable housing within the scope of what
may be funded by CILs, we propose to include it within the definition
of infrastructure so that if it is later demonstrated that affordable
housing is necessary, it could be included as part of
CIL.
We recognise that
the priorities for infrastructure may change over time. Several years
ago, few of us would have put flood defence as high up the list of
infrastructure priorities associated with growth as it is now. The
Government amendments provide for the definition of infrastructure in
the Bill to be revised to reflect changing needs. Such changes will be
subject to the affirmation of this
House.
Flexibility is
important, but so are safeguards. The Government amendments will enable
the creation of regulations that specify what should not be funded by
CIL and regulations to require local authorities to publish and make
available for public inspection the list of projects to be funded by
the levy. Perhaps the converse power to that is the power to create
regulations to restrict the ability of local authorities to use the
levy for projects that are not included on the list of infrastructure
that they draw up.
I
hope that hon. Members will see that these provisions are designed to
provide greater clarity about the purposes to which the revenue from
the levy will be put to deliver the infrastructure that is required for
local communities, developments and growth. I am happy to deal with any
questions that hon. Members may have and will respond to any points
that my hon. Friend wishes to make when he speaks to amendment No.
443.
Mr.
Betts:
I seek reassurance. The Local Government
Association is concerned to try to ensure that, fundamentally, it would
be for each local authority to come to a view about which
infrastructure it wanted to be developed and supported by CIL in its
area. The Government amendment includes a wide range of infrastructure
that it may be appropriate to fund from CIL. Presumably, as we
previously discussed that the process is still to be finally
determined, will each local authority look at the needs in its area and
be able to select the most appropriate requirements for the development
of infrastructure from the list of possibilities that amendment No. 556
indicates will be appropriate?
Mrs.
Lait:
I find myself in a bit of a
quandary. On the one hand, we have access to very little information,
yet the Minister has set out in the Government amendment the list that
will be in the Bill of potential projects for which CIL could be used.
I thank him for that. The list includes medical facilities—the
hon. Member for North Cornwall may wish to raise this point—so
the point about the primary care trust is, in a sense, covered. I would
like the Minister to clarify whether within
“recreational” he includes cultural facilities, so that
we can know whether theatres and art galleries will be included if the
local community agrees that it would like to have a theatre or art
gallery that cannot be paid for in other ways. That would be
helpful.
What
worries me is that on the one hand we have so little information, and,
on the other hand, the information that we are given, particularly in
the list, is prefaced by the Minister saying, “We may not need
to invoke it now, but we cannot know whether we will need to in the
future. Therefore, the widest possible powers are needed.” We
could find ourselves agreeing to something that initially sounds
reasonable, but, as he himself said about flood defences, who would
have thought 10 or 15 years ago that they would be as important as they
are now? We could suddenly find ourselves with a piece of legislation
that could be distorted, changed or widened in a way that none of us
ever thought of or expected. With the best of intentions, the Minister
is trying to cover as much as he can, but by so doing he leaves us open
to turning something into legislation that might have consequences
which none of us can begin to dream of at this
stage.
I would be
grateful if the Minister could confirm that small point about whether
cultural facilities are included in the list under
“recreational”, and just be warned about the concerns
that I am beginning to feel about the whole approach to this piece of
legislation and the fact that we are being asked to put on the statute
book the widest possible powers for CIL. That could cause long-term
problems.
John
Healey:
At this stage, the answer to the hon. Lady is
“possibly”.
John
Healey:
On culture. As things stand, if
the theatre were used for recreation, it would obviously fall directly
within the terms of the amendment. I think that this matter probably
requires further discussion and reflection with those with cultural and
recreational interests, as well with as local authorities and local
planning authorities. Indeed, because we are considering a Bill on the
practice of planning obligations, we need to look at the current
practice of planning obligations. Should we need to make the list any
clearer to deal with any wider concerns, we certainly
will.
Amendment
agreed
to.
Amendment made: No. 557,
in clause 167, page 94, leave out line 37 and insert ‘funded by
CIL,’.— [John
Healey.]
Mrs.
Lait:
I beg to move amendment No. 601, in
clause 167, page 94, line 40, at
end insert—
‘(d) ring-fenced
funding for community infrastructure to ensure that it is additional to
other infrastructure
monies.’.
The
Chairman:
With this it will be convenient to discuss the
following amendments: No. 603, in
clause 167, page 94, line 40, at
end insert—
‘(d) that such
finding should relate to community infrastructure and be in addition to
any other infrastructure
funding.’.
No.
575, in
clause 167, page 94, line 40, at
end insert—
‘(2A) The
regulations must be consistent with the principle that funding from the
CIL should be used to fund projects, or aspects of projects, for which
funds have not already been allocated
by—
(a) a Government
department,
(b) the Scottish
Ministers,
(c) a Northern
Ireland department,
(d) the
National Assembly for
Wales,
(e) a local authority,
or
(f) a regional development
agency.’.
No.
602, in
clause 167, page 95, line 3, at
end insert—
‘(c) require
authorities to use best endeavours to deliver the infrastructure upon
which the level of CIL is
predicated;
(d) require all
other providers of infrastructure involved in the delivery of
infrastructure, for which CIL is being levied, to use best endeavours
to assist in delivering the infrastructure upon which the level of CIL
is
predicated.’.
No.
604, in clause 167, page 95, leave out
lines 8 to 10.
No.
576, in
clause 167, page 95, line 27, at
end add—
‘(6) The
regulations must require the charging authority to
consult—
(a) relevant
parish councils,
(b) relevant
community councils in Wales,
and
(c) relevant community
councils in Scotland,
in the
areas affected by the development in respect of which CIL is
chargeable.’.
Mrs.
Lait:
The amendments would insert simple wording to ensure
that the community infrastructure levy is additional to other streams
of infrastructure development funding, and that the organisations
providing that other funding do their bit.
It is easy to
envisage a situation in which there might be a sudden call on the funds
of the relevant governmental body or of an infrastructure developer, so
that the funding promised to the community infrastructure levy for the
delivery of a project suddenly dries up. That could be because the
Chancellor of the Exchequer has decided to reduce that
organisation’s budget, or because the financial calculations of
the money available for the project were less than
robust.
Therefore,
we want reassurance that the community infrastructure levy is in
addition to the other streams of funding and is not seen to replace it,
and that the other funders carry out what they have promised to do, in
a timely way. Anyone who has worked with local authorities that are
working in partnership with a variety of different
bodies will know the difficulty of ensuring that all the money promised
to a project is delivered when needed. If the levy is to work, we need
to ensure that everyone plays their part at the right time, in the
right way, and without penalising the funding of other projects. Our
goal is to ensure robust financial management within all the
organisations. Finally,
amendment No. 604 excludes administrative expenses. It is easy to see
that a project’s funding could be top-heavy on administration,
which could absorb a greater share than it should; or that, by sleight
of hand, perish the thought, some administrative charges on an
area unrelated to the CIL-funded project could suddenly be offloaded on
to it. It is important to ensure that the money raised from CIL is not
spent on administration when it should be spent on the
project.
3
pm
Dan
Rogerson:
The hon. Lady makes a good
case for questioning that potential problem. Amendments Nos. 575 and
576 were tabled by my hon. Friend the Member for Carshalton and
Wallington and me. They concern the principle of additionality, to
which the Minister referred under an earlier clause. I certainly
welcome his comments on that. We are concerned that money that had been
identified for a local project might now be funded through CIL—I
cannot think why we are using a soft rather than a hard
“c”. Making a “cilling” does not sound
quite so dangerous as the
alternative.
I am
pleased to hear what the Minister had to say. We would not like to see
funding, which had already been identified and hard won after long
campaigning or much prioritisation for a particular project in a local
area, being diverted away. Our amendments would look at funding
infrastructure which is particular to the changing situation and the
grant of planning permission. I suspect that the Minister will tell me
that that is already what is intended. If he does, it will be good to
have that on the record once
again.
John
Healey:
I am sympathetic to the spirit
of some of the amendments, but not convinced that they are the right
thing to do or that they would help. I shall try to respond to the
substance of the points that the hon. Lady and the hon. Gentleman have
made. The clause provides that the regulations that we make must
require authorities collecting the levy to apply it to infrastructure.
It provides that the regulations may specify what does and does not
constitute infrastructure. Furthermore, clause 163 makes it clear that
infrastructure funded from the levy should support an area’s
developments. That is the essence of the levy
itself.
Amendment No.
603 appears to seek to establish the principle that CIL spending should
be additional to existing infrastructure spending. I am not convinced
that it is sensible to legislate for that, but let me say a little bit
more about additionality, in addition to the points I have already made
which the hon. Gentleman has kindly welcomed.
First, we have said publicly
and consistently that it is not our intention for the levy to work in
isolation from other revenue streams. It cannot be expected to pay for
all the infrastructure required, although as paragraph
47 of the document we published last week indicates, we expect that it
could make a significant contribution in some areas to some
infrastructure. Secondly, we want to give authorities the flexibility
to determine both their infrastructure priorities and how best to
allocate their funding streams to ensure that they are properly
delivered. The local
authorities will need to assess. They will need to cost the
infrastructure they require to support development. In doing that, they
should have regard to the level of funding that is likely to be
available from other national and regional or local funding sources,
including how they use funding sources that are not ring-fenced. It has
always been our expectation that the levy will be additional,
particularly for larger pieces of infrastructure. In many cases it will
provide only a part of the funding required. To underline that I quote
directly from our document:
“The Government believes
that CIL should not be used for general local authority expenditure,
nor to remedy pre-existing deficiencies in infrastructure provision,
unless these have been, or will in time be, aggravated by new
development.”
Dan
Rogerson:
I understand the point with regard to local
authorities. However, we have already debated how it might be
appropriate for the money raised to be spent through other agencies. It
would be good to have it on the record that it would also cover the
Highways Agency or any other Government agency, rather than just
picking on local
government.
John
Healey:
The hon. Gentleman makes a fair point. The
principle that I am seeking to establish is that we want the levy and
the revenue raised from the levy to be additional. I hope that a
combination of the provisions in the Bill and the consistent
declaration of that intent will give the hon. Gentleman the
reassurance that he seeks. Also, “additional” would be
difficult to define and to put in the
Bill.
Amendment
No. 604 relates largely to the hon. Lady’s concerns. Subsection
(4)(c) permits the application of the levy to administrative expenses
related to the infrastructure concerned or to the levy. I understand
the hon. Lady’s argument, but the measure will help to give
charging authorities the resources that they need to set, collect and
enforce the levy, and to plan and deliver the infrastructure that can
be funded by the levy. The levy builds on the existing provisions and
practice of section 106 and, in a sense, the provisions mirror those
under many of the section 106 agreements. They provide, in many cases,
for local planning authorities to recoup costs related to negotiations
or monitoring of the section 106 agreements, for example. Giving
authorities insufficient resources to operate the levy would ensure
that the levy is not effective.
The hon. Lady’s concerns
about administrative expenditure and efficiency are right, but to
preclude levy-related revenues from supporting the sort of work that is
necessary to make the levy operate effectively would be a mistake. I
hope that her amendment is probing and that she will not press it to a
Division. Ensuring that charging authorities have sufficient resources
is clearly central to their ability to deliver the levy but, more
importantly, to the infrastructure that it is designed to
support.
I hope that hon. Members feel
that I have given them a sufficient answer and that they do not feel
the need to press their amendments to a Division. If they do, I shall
ask my hon. Friends to
resist.
Mrs.
Lait:
The Minister was right to say that the amendment is
probing and aimed more at getting him to put on record the
Government’s approach to the issues. I am grateful to
him.
Dan
Rogerson:
I am grateful to the Minister for his comments.
I suspected that he would say what he said. If he is happy to take on
board the point that agencies other than local government could look at
the measure as a way to rejig their spending priorities, I shall not
press the amendment to a
Division.
Mrs.
Lait:
I beg to ask leave to withdraw the
amendment.
Amendment,
by leave,
withdrawn.
Amendments
made: No. 558, in clause 167, page 95, line 3, at end
insert—
‘(c) include
provision about the circumstances in which a charging authority may and
may not apply CIL to projects not included on the
list.’.
No.
559, in
clause 167, page 95, line 27, at
end add—
‘(6) In this
section a reference to publication includes a reference to making
available for inspection.’.—[John
Healey.]
Clause
167, as amended, ordered to stand part of the
Bill.
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