Memorandum submitted by the Mayor of London (PB 28)

 

 

Introduction

 

1. The Mayor of London strongly supports measures to improve the efficiency of the planning system which are essential if London is to continue to grow as an exemplary sustainable world city. However, there are some proposed reforms in the Planning Bill which could be more effective if they better embraced the Government's policy to 'devolve from the centre', a principle which is currently being put into practice in the new GLA Act. This would also be consistent with the recommendations from the Government's Review of sub-national economic development and regeneration ('sub-national review'), whereas some of the proposals as drafted are clearly not.

 

2. The Mayor has particular concerns about certain aspects of the Bill. He believes that:

the Infrastructure Planning Commission (IPC) should be empowered to transfer responsibility for taking decisions on infrastructure proposed in London to the Mayor;

National Policy Statements (NPS) which bear on London should be prepared jointly by the Government and the Mayor, and in preparing these statements the Government must have regard to the Mayor's London Plan;

any proposals to amend NPS should be fully and rigorously appraised and consulted on;

the Bill should be amended so that liability for the Community Infrastructure Levy (CIL) arises at the point that planning permission is granted;

the Bill should be amended to ensure that the CIL has the same provision as section 106 agreements which talk of "any interest in the land", and to require the liability for the CIL to be registered as a local land charge;

the CIL regulations should provide that, in London, the Mayor should be the sole charging authority for CIL purposes.

 

 

National Policy Statements and the Infrastructure Planning Commission

 

3. The Mayor is particularly concerned by proposals in the current Planning Bill for Policy Statements on national infrastructure provision and the role of the proposed IPC.

 

4. As the sub-national review recognised, London is distinct from other regions in having a robust and democratically accountable regional decision making framework, and major infrastructure schemes should normally be considered at the regional level within the context of the Mayor's statutory London Plan. The Mayor has already placed on record his firm opposition to using the proposed IPC effectively to circumvent legitimate debate about the need for, and desirability of, infrastructure proposals that may be quite clearly contrary to London Plan policy. It is also essential to recognise that even those schemes of genuinely national importance will have regional and local impacts, often very significant ones. If decisions on such schemes are to be taken out of the hands of locally and regionally accountable bodies, the Government has a clear obligation to ensure that the needs and concerns of neighbourhoods and communities are heard and considered in such decisions. The Bill as currently drafted does not adequately address this point.

 

5. Decisions on major infrastructure of the kind outlined in the Bill will be critical to the formulation and implementation of the Mayor's London Plan and the Mayor's other statutory strategies and policies.

 

6. Given this, the Mayor considers that:

The Commission should be empowered to transfer responsibility for taking decisions on infrastructure proposed in London to the Mayor.

Where the Commission chooses not to transfer responsibility in this way, the Mayor should be able to nominate for appointment one or more commissioners to the IPC for the relevant applications, in the same way as it is envisaged Welsh ministers would (as set out in Clause 62). This would ensure that decisions on infrastructure that may be of critical importance to the development of London could be informed by the participation of someone with a detailed knowledge of the capital and the issues facing it.

 

7. More specifically, while most of the thresholds for developments which the Bill proposes that the IPC should consider appear sensible, three need to be set at a higher level to ensure that they deal with schemes of genuinely national importance and not issues simply of regional importance, which are best left to the democratically elected Mayor. These are those for:

rail freight interchanges;

waste management; and

hazardous waste facilities.

Experience has already shown that such facilities catering primarily for London rather than national needs may well be above the proposed thresholds and should properly be considered by the Mayor and not the IPC.

 

8. In addition, there is a strong case for devolving decision making on non-national schemes which are currently proposed under the Transport and Works and Highways Acts in London to the Mayor. Such opportunities could be further enhanced if the streamlined single consent and public inquiry procedures currently suggested for national infrastructure were extended to apply to local and regional projects. This would be a natural next step in the thinking behind the planning provisions in the GLA Act, and would sit within the accountable structure of regional governance which exists in London, unlike other regions.

 

9. For all the reasons given in paragraph four, it is also essential that the Bill should provide that NPS which bear on London should be prepared jointly by the Government and the Mayor. More generally, in preparing these Statements, the Government must have regard to the Mayor's London Plan (which has statutory development plan status) and other strategic documents (the Mayor's Transport and Economic Development strategies, for example). Borough local plans should also be taken into account.

 

10. This approach would go some way to addressing the Mayor's concerns about the provisions in the Bill concerning the arrangements for consultation on NPS. At present there is no provision for consultation with regional bodies other than the Greater London Authority (GLA), and the Mayor would suggest that the regional development agencies should be included in the list of bodies Ministers must consult in Clause 8 of the Bill. The system must also ensure that the GLA is consulted on proposals in a neighbouring region, which might have significant impacts on London (decisions on ports and airports, for example) in the same way as is envisaged for adjoining local authorities in clause 8(3) of the Bill.

 

11. The Mayor considers it essential that any proposals to amend NPS should be fully and rigorously appraised and consulted on. He is concerned that the provision in clause 6(5) of the Bill that would enable the Secretary of State to dispense with undertaking a sustainability appraisal and consultation where it is deemed that a change does not materially affect the policy set out in the NPS. Deciding when this is the case may be highly contentious, and the fact that no change is proposed may be a major issue in itself. The Mayor believes that this provision should be omitted.

 

 

Community Infrastructure Levy (CIL)

 

12. The Mayor welcomes the proposals for a CIL. This should provide the basis for a straightforward and transparent way of securing funding through the planning system for infrastructure, avoiding the complexity that has grown up around use of section 106 agreements. In London, it is essential that the new system allows the GLA Group of organisations to collect the resources it needs to fund Crossrail and the other strategic infrastructure needed to support the growth London faces, as set out in the London Plan. There is justification for a different approach in London from the rest of the UK, given the unique set of regional governance arrangements here, and the Mayor's democratic mandate.

 

Charging authority in London

 

13. The CIL regulations should provide that in London, the Mayor should be the sole charging authority for the CIL purposes. There is no case for enabling boroughs to set local CILs as this would raise a number of difficulties, for example:

There could be questions as to which payment (regional or local) would have primacy.

Where developers need to make a case for the CIL discount (on viability grounds, for example) there would be questions as to who would make the final decision.

It will not be straightforward for boroughs to produce costed assessments of local infrastructure needs; in practice this is likely to need substantial inputs from the GLA and Government, with consequent resource demands. This is particularly important given that in London many functions are shared between the regional and local authorities (highways, for example).

Boroughs have in practice taken considerable time to produce development plans and other strategic policies, which would delay implementation of the CIL if, as suggested by ministers, it is to be linked to local development plans.

 

14. This strategic, London-wide CIL would be set by the Mayor to cover regionally important infrastructure identified and costed through the London Plan process, and would be collected by the boroughs and paid on by them to the Mayor. The likely result of this approach would be a comparatively low London-wide strategic CIL, meaning that developers are unlikely to face such high requirements that they will not agree to fund or support other priorities at regional or local levels through section 106 of the Town and Country Planning Act 1990 and similar provisions. Moreover:

Section 106 should be retained - with significantly recast policy guidance to replace the current Circular 5/05 (see below) - for boroughs to fund infrastructure and other local needs, and for the Mayor and boroughs to address matters such as affordable housing and the more local impacts of development proposals.

Circular 5/05 should be recast to move away from an impact-based approach towards one that addresses strategic and local needs towards which it is reasonable to expect developers to make a contribution. The emphasis should shift from mitigating the impact of development and towards focussing on the benefits that public investment in infrastructure brings to development, recognising the important role of such investment in facilitating and increasing the value of development. This approach would move towards the Government's objective of enabling the capture of greater levels of planning gain to support new infrastructure and housing. The GLA would be keen to work with the Government to identify the amendments required to the Circular to implement this approach.

The CIL regulations should include default powers to require boroughs to "act jointly" with the Mayor in connection with his setting and collecting the strategic London CIL (there is provision for this in clause 164 of the Bill). They should also require the boroughs to collect the strategic CIL and pay it on to the Mayor (provisions of this kind are envisaged by clause 168 of the Bill).

The Secretary of State and bodies like urban development corporations should not be charging authorities. Having more than one charging authority in London will simply introduce unnecessary complication and will make it more difficult to collect the resources needed to fund strategic infrastructure such as Crossrail.

This approach minimises the complexity of introducing a wholly new system in London and the difficult questions of timing and transitional arrangements this might entail.

 

Liability

 

15. Liability for the CIL should arise at the point that planning permission is granted, and local planning authorities should be able to impose a condition on any consent that development should not start until the CIL is paid. Provision could be made for actual payment at a later date where this would be appropriate. Leaving liability until development commences (as the Bill presently envisages) will complicate enforcement: once work has begun, effective enforcement resulting in payment would be difficult. The Bill should be amended to enable the CIL regulations to take this approach.

 

16. When the CIL becomes payable in respect of development, establishing who is the "owner" of land at any particular moment can be difficult, not least as ownership can be quite complex, and change quite rapidly, during the course of development. It would be better to have the same provision as currently exists with section 106, which talks of "any person with an interest in the land". The Bill should be amended to enable the CIL regulations to take this approach. It would mean requiring the liability for the CIL to be registered as a local land charge, coupled with a requirement that any changes in the persons "with an interest in the land" should be notified to the authority which collects the Levy.

 

Regulations governing the CIL

 

17. It is acknowledged that the Committee will not consider as part of its current deliberations the secondary legislation setting out the regulations which will govern the detailed implementation of the CIL. There are, however, a number of points which the Mayor wishes to raise regarding the CIL regulations, as it is essential that the Bill does not, deliberately or inadvertently, inhibit those regulations' ability adequately to address these issues.

 

18. The CIL regulations should not link liability for, or the amount of, the CIL to increases in identifiable land values. This would be extremely difficult to apply in practice, and would involve all the disadvantages previously identified with regard to the proposed planning gain supplement. Any proposed CIL de minimis threshold should only exclude the very smallest developments, such as genuine householder development.

 

19. The transparency of the CIL is a major concern of developers and house builders, particularly as regards delivery of the infrastructure towards which development will be contributing. To meet these concerns (and to assist with GLA monitoring of boroughs' collection and payment of the CIL), it is proposed that:

Both the Mayor and the boroughs should maintain a separate set of statutory accounts setting out the sums collected under the CIL, those spent and those transferred to other authorities.

There should be a list (set out in the CIL regulations) about what the CIL can be spent on. This list should include railways, to facilitate the funding of Crossrail.

The Mayor would provide annual reports about delivery of infrastructure funded by the CIL.

 

20. Enforcement of the CIL will be much more effective if it becomes payable at the point of grant of planning permission. This would allow enforcement by way of preventing development from proceeding, which is likely to be an effective deterrent. We would suggest that refusal to pay (and proceeding with development contrary to a condition that development should not start until the CIL is paid) should be made a criminal offence.

 

21. Liability to the CIL should be registerable as a land charge from the grant of consent, rather than from the time development commences given the uncertainty there often is about land ownership in development schemes.

 

January 2008