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Session 2007 - 08
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General Committee Debates
Planning Bill

Planning Bill

The Committee consisted of the following Members:

Chairmen: Sir John Butterfill, † Mr. Eric Illsley
Benyon, Mr. Richard (Newbury) (Con)
Betts, Mr. Clive (Sheffield, Attercliffe) (Lab)
Brake, Tom (Carshalton and Wallington) (LD)
Clark, Paul (Gillingham) (Lab)
Curry, Mr. David (Skipton and Ripon) (Con)
Dhanda, Mr. Parmjit (Parliamentary Under-Secretary of State for Communities and Local Government)
Duddridge, James (Rochford and Southend, East) (Con)
Ellman, Mrs. Louise (Liverpool, Riverside) (Lab/Co-op)
Ennis, Jeff (Barnsley, East and Mexborough) (Lab)
Fitzpatrick, Jim (Parliamentary Under-Secretary of State for Transport)
Healey, John (Minister for Local Government)
Jones, Mr. David (Clwyd, West) (Con)
Lait, Mrs. Jacqui (Beckenham) (Con)
Llwyd, Mr. Elfyn (Meirionnydd Nant Conwy) (PC)
Michael, Alun (Cardiff, South and Penarth) (Lab/Co-op)
Mole, Chris (Ipswich) (Lab)
Neill, Robert (Bromley and Chislehurst) (Con)
Reed, Mr. Jamie (Copeland) (Lab)
Rogerson, Dan (North Cornwall) (LD)
Sheridan, Jim (Paisley and Renfrewshire, North) (Lab)
Watts, Mr. Dave (Lord Commissioner of Her Majesty's Treasury)
Alan Sandall, Committee Clerk
† attended the Committee

Public Bill Committee

Tuesday 5 February 2008


[Mr. Eric Illsley in the Chair]

Planning Bill

Further written evidence to be reported to the House

PB 30 Friends of the Earth Supplementary
PB 35 High Peak Borough Council
PB 36 Friends of the Earth - Postcards

Clause 172

Relationship with other powers
10.30 am
Dan Rogerson (North Cornwall) (LD): I beg to move amendment No. 589, in clause 172, page 97, line 10, after ‘obligations)’, insert ‘subject to the requirements that—
(i) in any development where a contribution to affordable housing is secured by the charging authority, such contribution is calculated without regard to such CIL as may be payable;
(ii) in cases where sub-paragraph (i) applies, the payment of CIL may be reduced if the return on the investment in the development as a whole can be shown by the applicant to fall below a specified threshold; and
(iii) the method for calculating that threshold and the level of residual CIL payment referred to in sub-paragraph (ii) shall be specified in CIL regulations;’.
The Chairman: With this it will be convenient to discuss the following amendments: No. 617, in clause 172, page 97, line 14, after ‘CIL’, insert
‘, and about how to ensure that developers do not pay for the same infrastructure under two different powers’.
No. 610, in clause 172, page 97, line 14, at end add—
‘(3) Powers under section 106 of TCPA 1990 and section 278 of the Highways Act 1980 shall not be exercised to secure obligations to pay for and contribute towards infrastructure of a class included within any CIL calculation except—
(a) where the developer has elected to off-set an element of CIL liability against a section 106 agreement, provided for under section 168(4), or
(b) where the infrastructure is needed to access the site bound by the obligation and the need for that infrastructure is wholly or mainly a consequence of the development site.’.
Dan Rogerson: I welcome you back to the Chair, Mr. Illsley, as we continue our deliberations into the final straight.
Gains have been made in affordable housing and in local authorities strengthening their arm in negotiations with developers; they are getting better at it and securing more affordable housing as part of delivery. We do not want to see a conflict between CIL and the affordable housing element of a scheme, in terms of what the developer can afford to fund.
If there is such a conflict, the amendment seeks to ensure that the affordable housing element is handled first, so that as much affordable housing is delivered as possible, and the CIL element is considered after that. I hope that the Minister will support that principle. He might tell me that that is fine, and that as far as he is concerned the Bill will do that anyway, but I will be interested to hear his justification for that.
The amendment is therefore aimed at securing that progress towards achieving the affordable housing rate that we all want, to ensure that we at least begin to tackle the country’s affordable housing crisis.
The Minister for Local Government (John Healey): I can pretty quickly give the hon. Gentleman the assurance that he seeks. He might recall that, on Thursday, on the back of a Government amendment, the Committee discussed the nature of affordable housing.
Ultimately, one of the principal drivers of the levy is to create a way in which we can support and unlock housing growth, rather than hold it back or prevent it. That was the reason that, last Thursday, we introduced the Government amendment that would allow infrastructure to have an incorporated definition of affordable housing. However, I also made it clear that the Government intend that affordable housing will continue to be secured through agreements, rather than through the obligation process and the levy. That is our preferred way of operating. Clearly, it makes sense to have that back-stop, should we require it, if the fears of some that affordable housing might be choked off or reduced as a result of the levy are realised.
Dan Rogerson: May I briefly clarify one point? Obviously, we are entering a period of negotiations as to how CIL will work and be constituted, but it is not clear to me what powers are available to individual local authorities in that regard. For example, perhaps years in advance of a negotiation, local authorities might have set what CIL means to them, including its level and the types of infrastructure that it would fund. If they were at risk of not delivering through a separate section 106 agreement, would they then able to revisit it, to ensure the affordable housing element? If the benefit of CIL is that it is clear to all developers in the local authority in advance what the levy will be, how could they vary it in an individual circumstance if the section 106 negotiations were not delivering the affordable housing element?
John Healey: If the hon. Gentleman and others have further concerns about this matter, they would be properly dealt with when we move from the primary legislation to the process of production and the settling of charging schedules. However, he has registered his concerns clearly this morning and I have taken note of them.
Mrs. Jacqui Lait (Beckenham) (Con): I apologise for being slightly wrong-footed, but I was expecting another group of amendments to be called before this one. My concerns are very similar to those of the hon. Member for North Cornwall. However, mine go a little further than just affordable housing. I am concerned about ensuring that section 106 agreements can continue more or less as they are, not just for affordable housing, but in other areas because of the impact that the community infrastructure levy could have on the willingness of developers to contribute to section 106 agreements.
Sometimes, a properly agreed and managed section 106 agreement will be more effective for local communities than CIL. If there is a real need for something in a local community, a section 106 agreement might be more acceptable to that community than an infrastructure levy that is used to develop infrastructure outside the community that is not of immediate benefit to it. Amendment No. 610 would deal with concerns of that nature. If the Minister could reassure us on those points, I would be grateful.
John Healey: I think that I can reassure the hon. Lady in two areas. First, I will reflect on her further concerns about the interaction between section 106 agreements and CIL. There is an implicit flex in the intention of the amendment that would make the levy reflect contributions to affordable housing. She will appreciate that there is difficulty in that because it would take us back to one of the principal criticisms of the planning gain supplement, with its site-specific arguments and evaluations. To adjust levy liability for individual developments to reflect the level of affordable housing would take us into the territory of greater uncertainty, lengthy negotiations and inevitable disputes—particularly under the terms of the amendment—over rates of return on investment and how to define and establish such matters.
Secondly, I understand the hon. Lady’s concern that developers should not pay twice for infrastructure, through section 106 agreements and through the levy. Does that issue underpin her concerns?
Mrs. Lait: The impact could be that developers pay twice, but my concern is about which method has primacy. If a local community wants a health centre more than it wants the replacement of a road junction, could it insist on the use of section 106 rather than CIL to ensure that it gets the health centre?
John Healey: I think that the hon. Lady will find the document that we published nearly two weeks ago helpful on this matter, particularly paragraphs 64 to 66. Essentially, we suggest that section 106 agreements are appropriate in three areas: on technical matters such as restrictions on the use of land; on site-specific impacts, which are prerequisites for planning permission; and on affordable housing. Those are the matters to which section 106 agreements are best suited.
In our discussion paper, we specifically asked what approach should be taken to that question, which I hope reassures the hon. Lady and members of the Committee that we are working for the best solution. Through the discussion document, I want to seek views and then formally consult. Those are the two stages that I intend to go through on that. In fact, the document floats an option that is stronger than guidance: a statutory boundary between the two. That might not be the answer, but it is one of the options that we have flagged up in the discussion document, and that underlines the importance of the area.
Given that I have tried to explain how important that set of concerns is, how seriously we are taking it and the work that we have got in train to sort out the best solution, I hope that the hon. Members who tabled the amendments will feel that they have been useful probing amendments and will not press them to a vote.
Mr. Clive Betts (Sheffield, Attercliffe) (Lab): I apologise for not being here at the beginning of the debate. My hon. Friend the Minister was just dealing with amendment No. 617, which stands in my name. Certainly, the issue raised is in the minds of organisations such as the British Property Federation. In a debate last week, I asked whether a developer who paid for affordable housing on a particular site under section 106—negotiable with the local authority, as all section 106 agreements are—would be subject at the same time to CIL, particularly if CIL was on a fairly rigid formula. That relates to some of our discussions last week on how to measure CIL, and I accept that there are still a lot of discussions and negotiations to be had on whether it is a rigid formula.
A developer could come along who wants to negotiate 106 but feels that, despite giving away more on 106, he will still end up paying the same amount of CIL. Alternatively, will CIL, in practice, be more of a negotiation between the developer and the local authority? Although I accept that it would reduce the certainty that developers look for in some cases, it might also allow precisely that bit of leeway for a developer to come along and ask, “Well, I would like a little more work on highways on site, but will agreeing to that under 106 reduce the CIL I pay, or will CIL be fixed in any case? Should I really give nothing away on 106 because I will not get the benefit when CIL is calculated?” Will the Minister assure me that there is still room for negotiation between the various parties that he and his officials are talking to before a final scheme is determined?
John Healey: I shall not go over all the points that I made before my hon. Friend joined us, but the short answer is that there is plenty of scope and a process for detailed further discussion. I remind him, however, as we have said at several stages of our discussions, that our principal intent is to set out the levy in a charging schedule and, where possible, to avoid uncertainty, site-specific negotiation and a lack of predictability and openness about the process, as in the situation that he cited. In such a situation, there could be disputes about the right and realistic expectation of a developer’s contribution on a site-by-site basis. In relation to his concerns, I am anxious that we are not dragged back to that sort of situation.
Clearly, there is plenty of discussion still to be had on how the proposal might work in practice, but my hon. Friend generally underlines the case that I made to the Committee last week for affordable housing principally being best suited to 106 agreements and not to specification as an eligible type of infrastructure that could be paid for under the levy. We made the amendment last week as a back-stop. If the level of affordable housing that the country badly needs, and that the Government badly want to see, starts to dry up as a result of the proposal, we would have the capacity in primary legislation to designate affordable housing as an allowable form of infrastructure to be supported by the levy. That is not our intention, however, as we believe that affordable housing is, as now, best dealt with through section 106 agreements.
10.45 am
Dan Rogerson: The hon. Member for Sheffield, Attercliffe has hit on the point that I was trying to make, although not very clearly or eloquently, in my intervention on the Minister about the conflict between a process of negotiation under 106 and something that is fixed in advance. One of the benefits of CIL is that it is transparent. Everyone will know what is expected of them before they bring their development to the table. If a problem comes to light in relation to the implementation of CIL, that will impact on negotiations under 106.
While I am pleased to hear that CIL can be revisited to take account of the amendment we discussed last week, it would be too late for many developments that might already have taken place. As I have mentioned previously, I have 70 parishes in my constituency, and some are very small—if one development has happened, that will be it for the next 10 years. That is the cause of my concern. I will not press the amendment to a vote but further examination is needed so that we do not lock the stable door after the horse has bolted and lose out on an opportunity to get affordable housing in some areas. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Amendments made: No. 568, in clause 172, page 97, line 11, at end insert—
‘(1A) CIL regulations may include provision about the exercise of any other power relating to planning or development.’.
No. 569, in clause 172, page 97, line 12, leave out from ‘how’ to ‘and’ in line 14 and insert
‘a power relating to planning or development is to be exercised;’.
No. 570, in clause 172, page 97, line 14, at end add—
‘(3) Provision may be made under subsection (1) or (1A), and guidance may be given under subsection (2), only if the Secretary of State thinks it necessary or expedient for—
(a) complementing the main purpose of CIL regulations,
(b) enhancing the effectiveness of CIL regulations,
(c) preventing agreements, undertakings or other transactions from being used to undermine or circumvent CIL regulations,
(d) preventing agreements, undertakings or other transactions from being used to achieve a purpose that the Secretary of State thinks would better be achieved through the application of CIL regulations, or
(e) preventing or restricting the imposition of burdens, the making of agreements or the giving of undertakings, in addition to CIL.
(4) CIL regulations may provide that a power to give guidance or directions may not be exercised—
(a) in relation to matters specified in the regulations,
(b) in cases or circumstances specified in the regulations,
(c) for a purpose specified in the regulations, or
(d) to an extent specified in the regulations.’.—[John Healey.]
Question proposed, That the clause, as amended, stand part of the Bill.
The Chairman: With this it will be convenient to discuss new clause 5—Abolition of planning contributions
‘Sections 46 (planning contribution), 47 (planning contribution: regulations), and 48 (planning contribution: Wales) of the Planning and Compulsory Purchase Act 2004 are omitted.’.
Mrs. Lait: This will be brief as the new clause is intended to elicit information from the Minister. Clause 172 is commonsensical and we do not have any problems with it, but the new clause relates to planning contributions under the 2004 Act. Given that we are talking about CIL and section 106, we would be grateful if the Minister could advise us on the role of planning contributions under that Act. We might have a third stream of contribution that could clobber developers, particular in a market where land properties and values are going down, and it would make it increasingly difficult to get the developments that he is looking forward to seeing.
John Healey: I am glad that the hon. Lady sees the clause as commonsensical.
Mrs. Lait: Well, given—
John Healey: Shall we leave it at that?
Given that the planning contribution system was designed to replace section 106, the repeal was not included in the 2004 Act. However, now that we are moving to introduce the levy, I have considerable sympathy with the hon. Lady’s argument. I will look further at her proposal and return to the matter on Report.
Mrs. Lait: I am grateful to the Minister and look forward to Report, because we can chalk that up as the No. 1 possibility.
Question put and agreed to.
Clause 172, as amended, ordered to stand part of the Bill.
Clause 173 ordered to stand part of the Bill.
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