Abolition of Regional Spatial Strategies: a planning vacuum? - Communities and Local Government Committee Contents

Examination of Witnesses (Questions 259-340)

Q259 Chair: Thank you very much indeed for joining us this afternoon for the final session of evidence taking in our inquiry into the abolition of Regional Spatial Strategies and its consequences. Secretary of State, just for the sake of our records—I think we know you fairly well even without a nameplate—perhaps you would introduce yourself and your colleagues.

Eric Pickles: My name is Eric Pickles, Secretary of State for Communities and Local Government.

Greg Clark: I am Greg Clark, Minister for Decentralisation.

Katrine Sporle: I am Katrine Sporle, Chief Executive of the Planning Inspectorate.

Q260 Chair: Welcome. Secretary of State, if you had come before us three weeks ago we might have begun with a slightly different question about Regional Spatial Strategies, but since then there has been a court case on the issue. Following the decision in that case that you did not have power to revoke Regional Spatial Strategies in general but had to wait for a new Act of Parliament, is the situation that in essence currently RSSs are in existence and local authorities have to follow them in developing local plans and considering any planning applications that come before them?

Eric Pickles: I think they are one of the factors that they need to take into consideration. Another factor is emerging policy. Mr Betts, you will recall that in both the Conservative and Liberal Democrat election manifestos there was a pledge to remove the Regional Spatial Strategies; indeed, it formed part of the Coalition Government's document. A sensible, prudent authority will take into consideration the fact that in a matter of days a Bill will be produced—we have produced the draft clauses of that Bill—and in a matter of time these spatial strategies will be removed. Therefore, while it is a factor it is not necessarily a decisive one.

Q261 Chair: Surely, when the Planning Inspectorate receives appeals on planning decisions, whether or not local authorities have taken into account the Regional Spatial Strategies, and indeed local plans that currently exist based on those strategies, will continue to be an important element when it looks at any appeal decision, will it not?

Katrine Sporle: Yes, Chairman. Inspectors will, as always, start with the local plan—they start with section 38(6) of the Planning and Compulsory Purchase Act 2004—which must be in general conformity with RSS. Inspectors now have a clear instruction that, in the light of the court decision, they will go back to the parties and ask for any evidence that has not previously been taken into account but which takes into account extant RSS.

Q262 Chair: So, from your point of view, Regional Spatial Strategies are still in existence, and local authorities, when looking at a planning application, take account of that through their local plan which itself is currently based on evidence from the RSS?

Katrine Sporle: In general conformity.

Eric Pickles: Mr Betts, you have to remember that only 18% of authorities have up-to-date planning figures, so we are not talking about the whole of local authorities.

Q263 Chair: That means some local authorities are still based on the unitary development plans because they have not upgraded them?

Eric Pickles: They have not upgraded them to the new figures.

Q264 Chair: But their evidence base will still be at regional level in forming the UDPs?

Eric Pickles: We would all expect decisions to be made on an evidence base, but you have to understand that a new system is now devolving through the New Homes Bonus. That will be followed by a duty to co-operate. The consultations on the New Homes Bonus ends towards the end of next month. It is not as though these things are taken in isolation.

Q265 Chair: We will come back to the New Homes Bonus in a minute, Secretary of State. As part of our inquiry, it has not been our job to second guess government policy on the abolition of the Regional Spatial Strategies. As you say, it was in the Conservative and Liberal Democrat manifestos. But one thing that has concerned us so far is evidence from councils, practitioners and others that it was almost as though the world ended and before the new world began they were left in a vacuum. Without the regional spatial strategy, which underpinned existing LDSs, if they had them, or regional evidence that underpinned UDPs, it was not clear where the evidence base was that they should use for planning decisions from now on. If we have at least a breathing space during which Regional Spatial Strategies continue to exist until the new Act is passed can you give comfort to people that when the new regime you have set out comes in, which is clearly a different one, there will be a transitional period to allow them to work their way towards it? The last time we had a planning Act there was a safe policy understanding that existing plans would continue for a time until new ones could be formulated.

Eric Pickles: We are in a transitional period right now with the move across to the New Homes Bonus. This is not theoretical. Houses that are granted planning permission now will qualify for the New Homes Bonus, because that is not paid until completion. We are moving across to a system that is not target or paper-based; it is not based on the number of planning permissions you get through, but on the actual number of houses you complete. It works on two levels: first, it is an encouragement for planners to grant permission; but, secondly, it is an encouragement to local authorities to ensure that that process of building is carried out expeditiously, because the bonus, as I said, is not paid until the house is completed.

Greg Clark: You asked whether in effect robust numbers needed to be taken into account by authorities in setting their plans. This was made clear in guidance, which I think was issued back in May at the time of revocation. I have a copy of the guidance in front of me. It says: "Will we still need to justify the housing numbers in our plans? Yes. It is important for the planning process to be transparent, and for people to be able to understand why decisions have been taken … they should do this in line with current policy." So, we have always been clear that you need to have housing numbers that are defensible.

Q266 Chair: Yes, but if you have an authority with an existing local plan based on evidence, maybe through Regional Spatial Strategies, and the Act comes into force, do those plans continue to exist based on the evidence with which they were drawn up at the date the Act is passed and for a period of time until they can collect a new evidence base?

Greg Clark: It is open to the local authority to collect the evidence that they feel justifies the decisions they want to take. If they feel that the number imposed on them by the RSS does not make sense and they can collect evidence that demonstrates a different number is appropriate, we have been clear from the outset that that is what they should do.

Eric Pickles: A number of authorities have responded to that. Somewhere in the region of 60-odd local authorities are putting plans to the inspectorate. I think there are another 50­odd in the pipeline. Is that right?

Katrine Sporle: Sixty-four are currently under examination and 54 have been published and will come to us for examination within the next few months. From our point of view, we have never been so busy.

Q267 Chair: So, those plans were drawn up on the basis of the RSS and will continue to be the plans unless an authority chooses to redo its evidence base and come back with new proposals?

Greg Clark: Correct.

Q268 George Hollingbery: To elaborate that a little further, if they had robust numbers in front of them before they started, which were then changed through the imposition of RSS numbers, they can rely on those previous numbers as long as the evidence is reasonably up to date. Would that be a reasonable conclusion to reach?

Eric Pickles: If they have gone about it in a rational process and it is not done just on the basis of, "We'll cut a certain number across." But those Option 1 numbers did go on the basis of evidence, and I think that if the inspectorate were happy about that then, yes, that is probably the case.

Q269 George Hollingbery: In a couple of cases round the country, the inspectorate has found for the appellant on the basis of five-year land supply. Ms Sporle, perhaps you would comment on how the five-year land supply figures affect decisions at this very moment. I have a question for the Secretary of State. Do you agree that clearly there will be a time of confusion, as already identified by the Chairman, between now and Royal Assent of the localism Bill, but thereafter until finalisation of the national planning framework a period of uncertainty will be created?

Eric Pickles: I do not accept that for a moment. We are moving from one system to another; we are moving from the Regional Spatial Strategies with housing numbers to one in which local authorities are encouraged to move towards building houses on the basis of incentives. Our principal concern as we move to the new system, which is now beginning to be well developed in the sense that local authorities are responding in granting planning permissions, is that under the new system local authorities have the prime responsibility for ensuring a decent supply of housing.

Greg Clark: In the guidance that we issued to authorities there was the question: "Do we still have to provide a 5 year land supply? Yes." It then says various things and goes on to conclude: "Authorities should also have a five-year land supply of deliverable sites. This too will need to reflect any changes to the overall local housing ambition," so it is absolutely clear.

Q270 George Hollingbery: To elaborate, there are issues other than housing, which is one of the thrusts that I am moving towards. The national planning framework will be very important in deciding how some of those issues—Gypsies, Travellers, minerals and so on—are dealt with. Can we just discuss that a little?

Greg Clark: There are two policy undertakings: one is the localism Bill, with which everyone will become very familiar very shortly; the second is the commitment in the Coalition Agreement to rationalise and revise the national planning framework. It is clear that some things need to be decided nationally, and local planning needs to be in a national context. I think it has grown to a size that is out of control. I am advised that there are more words in the current PPSs and guidance notes than there are in the Bible or the complete works of Shakespeare, which obviously means it is not accessible. While the Bill is going through its Committee stage, we will be working with the industry, local government and stakeholders to rationalise this into something that is clear and usable.

Q271 George Hollingbery: On the issue of the five-year land supply, which I know the Minister covered, am I led to believe that local planning authorities will need to be absolutely explicit in their belief—somehow written as a cabinet minute or some such—that the five-year land supply that perhaps they had previously agreed to in an LDF, or a deposited document, has been superseded by their re-examination of the data since that date?

Eric Pickles: If they go about it in a reasonable process where they look at the numbers and consider what is possible, yes, that is what is necessary, but it must be substantially a proper examination rather than just a simple process of arithmetic.

Q272 George Hollingbery: Ms Sporle, may I get your reply on that?

Katrine Sporle: It is clear that inspectors always look for the five-year housing supply as set out in PPS3. Inspectors then look at the robustness of the evidence and the deliverability of the supply being put forward. That does not change.

Q273 George Hollingbery: Despite the fact that a local authority may have said that it has changed its mind about the amount of housing it wishes to deliver?

Katrine Sporle: The local authority still must produce a five-year housing land supply.

Q274 George Hollingbery: So, they would need specifically to re-examine their five-year housing supply and specifically and overtly produce a different assessment of their five-year housing supply?

Katrine Sporle: Any local authority wanting to change the approach in their development plan would have to come up with the evidence to support that change.

Q275 George Hollingbery: If they were to make an adverse decision against that assumption?

Katrine Sporle: Indeed. Over and above or below RSS, they would have to come up with the evidence.

Q276 James Morris: Secretary of State, it would be fair to say that one of the paradoxes in the evidence with which we have been presented is that a lot of people liked the planning framework provided by the RSSs but, as you know, the reality is that over the past 10 to 15 years we did not build enough houses. Can you say a little more about the policy drivers that underpin the movement towards the abolition of Regional Spatial Strategies in terms of overturning that?

Eric Pickles: In other words, "Nice policy. Pity about the resource." We want to see more houses built. We do not think that the Regional Spatial Strategies delivered them, because it really was about ticking a box and going for an ambitious target and it did not really matter. There were no consequences for not doing that other than that your target increased. That was why we went for a system that rewarded local authorities and gave an incentive.

It is important for government and local government to realise, to misquote Clint Eastwood, their own limitations. We have tried to bring in a number of reforms that work with the market rather than against it. After all, the purchase of a house, maybe the purchase of a car, is one of the few things for which you can barter, so the market is different. It does not mean that the incentive is everything. We expect them to move more towards planning and less against development control, because the whole thing is predicated on conflict. What we wish to see are communities working harmoniously together to agree on numbers.

Q277 James Morris: A lot of the evidence presented to us is that there is a gap around the strategic planning function. Do you accept that in the disaggregation that you are implementing there are some gaps around how we bring planning together in sub­regional areas or between local authorities?

Eric Pickles: The duty to co-operate is an important function of local authorities, but this is really about bringing planning closer to communities and the reality on the ground. I appreciate it is comforting to planners but we do not believe that it is a system that works. The suggestion of a vacuum is completely wrong, because we are now moving to a different system. That different system is now in place, in the sense that its principal ingredient is the new housing bonus and new houses that are granted permission will qualify for it.

Q278 David Heyes: Secretary of State, you quite rightly reminded us that the abolition of the Regional Spatial Strategies was a manifesto commitment by both governing parties. To read it back to you, Conservative policy was: "Control over development will revert to local level, with no statutory planning documents between the national planning framework and local authorities' new local plans." The written evidence that the Department has provided seems to contradict that, because it reads: "We believe it would be helpful to offer authorities who want to work together more formally the option of developing strategic planning frameworks with statutory status." What exactly is that about?

Eric Pickles: Mr Heyes, it is all about a coalition. You come together; you make compromise and come up with something slightly different.

Q279 Simon Danczuk: Better or worse, sir?

Eric Pickles: Oh, it is much better.

Q280 David Heyes: You have abolished the statutory framework. The document you have provided says that you will reintroduce a statutory framework. How will that work? What exactly is proposed?

Greg Clark: The key difference is that it is bottom up rather than top down. We have said, it is absolutely right, that where strategically adjacent authorities find it convenient—you had some evidence today from Manchester—to pool their sovereignty, as it were, and have a cross-city approach, particularly to economic development, obviously it makes sense to do so. Another example is my part of the world: Kent and Essex. There you clearly have infrastructural connections, common development needs and challenges around the Thames estuary. Through the local enterprise partnership they have decided to come together to pool their sovereignty, so what you have is a voluntary system that reflects a natural economic geography that is not only permitted but is part of the system rather than the imposition of a regional arrangement that, in the case of Kent and Essex, separated the natural interests between those regions.

Q281 David Heyes: How will these voluntary arrangements, which is how you describe them, have statutory status? How will you give them statutory status?

Greg Clark: They will enjoy the statutory status that the separate constituent bodies have; they can pool them. If they want they can have a joint plan.

Eric Pickles: We need to remember that it has always been possible for local planning authorities to do this. This just reaffirms the opportunity for them to do so. This puts them back on much more familiar territory.

Q282 David Heyes: To me, it feels like back-pedalling and that the abolition of RSSs was not fully thought out and this is an attempt to replace something that was abolished in haste.

Eric Pickles: No. I think it was necessary to move at a reasonable pace. It was a political decision, but we felt that the RSSs were not effective in delivering housing targets. If you like, we came to a decision that something was not working. I am sorry to put it in such extreme terms, but it is like deciding that we want to get rid of the death penalty and then executing everybody on death row in order to have a nice clean start. That did not seem to us to be a very sensible way to go about it.

Q283 David Heyes: It is a very colourful way to describe it. You talked about the importance of the duty to co-operate. How will that be of any value without any sanctions to enforce it?

Eric Pickles: I think we have a much more optimistic view with regard to local authorities. I pick out the Greater Manchester authorities. One of them is Conservative but the rest are Labour. There you have a number of authorities that have sensibly come together to work in harmony on strategic matters. I think that the decision of Kent, Essex and East Sussex to come together will be a force in which they can cooperate together. It is in their interest to cooperate. Much of the structure that was put in before the spatial strategies was predicated on cooperation and worked very well. I am confident that local authorities will rise to this challenge.

Q284 David Heyes: You are right to describe the quality of the cooperation that has gone on in Greater Manchester over the years, particularly through AGMA. I think that is a model.

Eric Pickles: It is the apple of my eye.

Q285 David Heyes: Incidentally, you were wrong about the political control of the 10 local authorities. I think that at least two are under Lib Dem or coalition control.

Eric Pickles: That is because I am blind to political bias.

Q286 David Heyes: It undermines my point, because even in those circumstances that level of co-operation has proved possible, but it is not typical. The reason AGMA stands out is because it is so atypical. The pattern elsewhere in the country is one of conflict and failure to agree. Will you need to look for reserve powers for yourself to intervene where the duty to co­operate, or the spirit of it, is not being followed?

Eric Pickles: I think the spatial strategies were mean in spirit and there was an assumption that things would always go wrong. What we offer is obviously a carrot or inducement with regard to the amount of money that comes in, but in addition to that, particularly through the LEPs, the more authorities co-operate the more power we will be prepared to push down to them.

Q287 David Heyes: Will there be a duty to co-operate between LEPs?

Eric Pickles: Yes.

David Heyes: That is the intention, is it?

Eric Pickles: Absolutely.

Q288 James Morris: I want to come on to local enterprise partnerships. A lot of the evidence presented to us is about the gap to which I referred earlier in relation to strategic planning. In the way you conceptualise local enterprise partnerships, I wonder how they would take on planning functions. Would you look more for non-statutory or voluntary co­operation by players? For example, in the Black Country, which I represent, the four local authorities would take on much more spatial planning decisions.

Eric Pickles: We quite deliberately tried to get different paces from LEPs and to encourage their ambition. I envisage that a number of LEPs will move towards this by way of co­operation with one another. But Greg has been actively involved with colleagues from BIS in looking at that.

Greg Clark: Mr Morris, the answer is that it is up to them. I am sure Members of the Committee have read some of the bid documents. It is part of their ambition and their purpose in coming together is to be able to have joint strategies, to favour economic development and say to outside investors that if they come to their areas they will have a planning regime and system for processing planning applications that is certain, dependable and professionally organised. That is one of the ways in which they will present themselves to the world. In some of the more rural areas they have different priorities, but it is open to all of them to pool sovereignty in that way.

Q289 James Morris: Is not one of the dangers of that approach that, because you do not have total national coverage for LEPs, you will have a patchwork quilt-type approach, with some areas having dependable and existing voluntary arrangements and other areas where there is a degree of vacuum? How do you think you may be able to overcome that?

Greg Clark: My expectation is that there will be comprehensive coverage. Having seen the enthusiasm behind the bids that have been approved and what is already happening—there will be further announcements quite shortly—I do not think it will be long before virtually the whole country is covered. That certainly was not a requirement and it is interesting that that ambition has been put forward, but they will look different. If you think about the regions that preceded them, in terms of economic coherence, some of them were barely coherent at all. Areas of Hertfordshire were linked to Great Yarmouth. That was an impediment to a sensible system of planning. I think you heard someone from Northamptonshire talking about natural economic communities coming together and resolving issues between them. It will be patchwork but in a positive way, because Britain is a patchwork of different focal points.

Eric Pickles: I think we were quite sensible in deciding to have a traffic light system that encouraged those green lights—the 20-odd that were first announced—because the ones that were quite close now have had an opportunity to see what is possible. I am very confident that we shall be making an announcement very soon with regard to the next tranche.

Q290 James Morris: To be clear, you do not see LEPs as having a statutory planning function in the traditional sense, but how will that be expressed? Do you conceptualise it as a pooling of sovereignty by local authorities?

Greg Clark: There are two things. First, they can pool their sovereignty, which can be considerable. If you bind together, the Manchester authorities being a good example, that will be a very powerful set of planning arrangements. The other thing we have said is that once these are set up, the initiative should come from the bottom up rather than the top down. We are not organising the system from Whitehall and saying they can do this and only that. If a well-organised and highly performing LEP comes to us and says that the partners in it, the businesses and local authorities, really would like to do things in this way and take these powers, I think it is characteristic of our demeanour in government that we want to say yes to it and find a way to make it happen rather than constrain them to do only what is rather meanly conceded in advance.

Q291 Simon Danczuk: LEPs do not have any democratic accountability, but you are happy to give them the powers you have just talked about in terms of planning issues.

Greg Clark: They do have democratic accountability through the local authorities that make them up. Those authorities participate voluntarily; they are not coerced into doing it.

Q292 Simon Danczuk: But the people who sit on the LEPs are not democratically elected, are they?

Greg Clark: Yes; I expect a good proportion of them to be local authority members.

Q293 Simon Danczuk: But business people and others will not sit on it?

Greg Clark: Business people as well, absolutely.

Q294 Simon Danczuk: Will they be elected from chambers and things like that?

Greg Clark: It will be up to each local partnership how they put their board together. I would expect to see the voluntary sector represented as well.

Q295 Simon Danczuk: But they are not all elected.

Greg Clark: Not everyone is elected, but crucially, the local authority members will be voluntary participants in this, in complete contrast to the status quo ante where the regional arrangements under the RDAs were a required creature of central government, including the boundaries and their functions, without that degree of local democratic accountability.

Q296 Chair: To turn it round slightly, LEPs may not be on a statutory basis so there could be a pooling of powers voluntarily by local authorities. Could you see a situation where local authorities statutorily had to have regard to decisions taken by LEPs, which might deal with a situation where, say, eight of nine authorities had agreed where a waste disposal facility ought to be but the one authority where it was to be sited did not?

Greg Clark: It is a pooling of sovereignty, so it is for them voluntarily to decide what they want to do. If they were to request certain statutory powers we would have to think about it, but there is no assumption or provision that a particular authority could be overridden in that way.

Q297 Chair: I did not say "overridden" but that local authorities when forming their local plans had to have regard to arrangements which a LEP had formulated.

Greg Clark: The duty to co-operate will apply to local authorities and the relevant bodies including LEPs, as the Secretary of State says, so they would need to demonstrate that if the other authorities in the area working through a LEP had taken certain decisions they had co-operated with that. That is not to say they would be obliged to be dictated to by it, but they would need to show that they had not put their head in the sand about it.

Q298 George Hollingbery: This leads on very neatly to a question that arises for me. Post-Royal Assent of the localism and decentralisation Bill, presumably the Planning Inspectorate will look for authorities to have comprehensive waste strategies and so on and so forth. Presumably, they will have been agreed in one of these aggregated bodies where we have pooled sovereignty, or whatever it is we have done, and will have to rely upon the evidence that was gathered for the regional spatial strategy process, I would imagine, if they want something in place reasonably quickly. Presumably if that evidence was sensibly and reasonably collected it will be good evidence. It just makes me wonder why it was decided to abolish the RSSs in their entirety rather than just ditching the housing element.

Eric Pickles: That was something we did consider, but what we wanted to do, as Greg has put quite eloquently, was change from a top-down to a bottom-up planning system and a regional spatial strategy is incompatible with that concept. The idea is for localities, neighbourhoods and communities to be able to decide how their neighbourhood grows, working in conjunction with adjoining authorities where necessary. The system is predicated on conflict. What we are trying to do is take out that conflict. I am quite heartened by the number of planning applications coming out and the number of authorities now moving forward with a proper plan. A plan should not be owned by regional specialists; the plan should be owned by the community.

Q299 Stephen Gilbert: Secretary of State, picking up the point about moving away from a top-down approach to one where localities choose their own futures, that is not the case for waste or energy policies or policies relating to minerals, where the Government have accepted that there remains a strategic need. How do you square strategic direction through the major infrastructure planning unit proposed for those areas and the desire to move away from something that is top down?

Eric Pickles: Nothing is absolute; everything is a balance. Clearly, the nation has needs with regard to power, waste disposal and the like, but it doesn't mean to say that everything must be taken at the appropriate level. The Coalition believes it is important that particularly things like housing should be about a locality and what is reasonable. We believe that we are moving to a system where we will produce more houses because of the level of the incentives than previously where there was not really any incentive to build.

Q300 Stephen Gilbert: What you appear to be saying, Secretary of State, is that the aggregate of local need and local decision making in terms of housing policy will be sufficient to meet national need, but that communities will not be able to make those same choices on energy, minerals and waste policies and therefore they have to be reserved. On the one hand, there appears to be trust in communities to come to a view on housing, which I think colleagues will explore in a minute, and on the other hand, a lack of trust in them to come to a view on those other issues.

Eric Pickles: Mr Gilbert, I am open to persuasion; I am very open to persuasion. I would hope that against the framework of what we are doing with housing—because this is a really big change—the kind of decisions that have to be made in the national interest will have much more local buy-in than they might otherwise have done.

Q301 Stephen Gilbert: So, it's not a concern that, for example, a wind farm project or incinerator project may not be delivered if the delivery was left to local decision making?

Eric Pickles: No. I think that under the old system we came close-ish to having planning policy decided by appeal. I think it is much more sensible to be able to deliver that with local consent. I don't accept the NIMBY argument. I believe that most communities recognise the needs of wider communities and would be willing, provided it was entered into transparently and sensitively, to accept community facilities.

Q302 George Hollingbery: I'm very sorry, Secretary of State, I forgot to ask something a little earlier. The White Paper on local growth talked about the creation of a major infrastructure planning unit and its responsibilities for minerals and waste management. I think there was some confusion in the Committee earlier. There was a rumour that this has been rescinded—what was said in the White Paper—and an email had been distributed.

Eric Pickles: No.

Q303 George Hollingbery: Is it correct that that still remains the property of the major infrastructure planning unit?

Eric Pickles: Yes.

Q304 Heidi Alexander: I would like to ask a few questions about housing supply. Secretary of State, time and time again today, you have said you want to see more homes built. So do I. Three weeks ago, the Committee took evidence from planning consultants. Having carried out a survey of local authorities, they found that 182,000 homes had been taken out of the planning pipeline since the first announcement of the revocation of the Regional Spatial Strategies. In light of evidence like that which the Committee has received, what makes you think that local authorities will build more homes and change their mind and stop taking homes out of the planning process?

Eric Pickles: I am sure the Committee doesn't need me to point out how iffy that evidence was. It was conducted on the basis of a telephone call in which the person at the other end might decide on various numbers. No formal decision has been taken by local authorities. The immensely important thing is that this was about a theoretical number put together; it was not about real houses. It was not about real permissions; it was about people thinking whether they were going to change their numbers. I found the actual numbers very unconvincing.

Q305 Heidi Alexander: Do you accept that the sum of local authority targets might not meet the overall national demand for housing?

Eric Pickles: Evidence suggests that those national targets have singularly failed to do so because there is no incentive to build. People are quite happy to put in various planning permissions but it's the market that determines what is actually built. What we tried to do was change from keeping people within my Department happy, because we could see the Prime Minister and say we had the numbers, to putting bricks and mortar on the ground and building homes for people. We cannot do that. As far as it concerns my Department, all we can do is to try to create conditions in the market to reward local authorities for building new homes.

Q306 Heidi Alexander: Do you have any concerns about public perception that planning permissions are being bought?

Eric Pickles: I think that's a ludicrous idea; it would be as ridiculous as to suggest that the old system was some kind of commissar imposing numbers on local authorities, although I confess that I might have been guilty of saying that in my less temperate moments.

Q307 Heidi Alexander: My last question, Chair. You talked, quite rightly, about taking conflict out of the planning process. Sadly, from my experience, I perhaps do not share your optimism, Secretary of State. My experience is that often communities, groups and individuals will act in their own short-term interest as opposed to the larger, wider interest. Whilst you may have had a different experience, does it concern you that sometimes people recognise that housing is needed but not at the end of their road or garden? What do you feel about that? How will the new system mitigate that?

Eric Pickles: Our predecessors—I am sure not you and certainly not me—turned up at various public meetings and said, "If you take this housing then we'll be able to divert some money to the local school or get that roundabout fixed". The truth is they were lying. This system enables local people to be rewarded. Local people will be better off, because we envisage in the New Homes Bonus and in CIL—you will have seen the statement yesterday—significant amounts going to the locality. We intend to ensure that future 106 agreements are tied very closely to a local community. People are not stupid; they have not wanted new development because they realise it will stretch local services, but now we have a way to ensure that local services are funded on the basis of new development. I move towards this with a song on my lips and an intense feeling of optimism that at last we have something which might work.

Q308 Bob Blackman: Clearly, there is a concern—I understand why you have acted in this way, Secretary of State—that the number of housing starts and completions is at the lowest level since 1924. Do you have an estimate of how many properties would have been built if the New Homes Bonus had not been introduced?

Eric Pickles: I have estimates of what it might be worth just based on last year's figures, if the Committee is interested in that. Would that be helpful?

Q309 Bob Blackman: That would be helpful.

Eric Pickles: We are very clever people; we have prepared a magnificent pack which I read continuously over the weekend. We looked at a few authorities to get a mixture: Milton Keynes and Durham unitary authorities; the small district of North Dorset; and, on the periphery, Watford. Remember that the amount is over six years, so the amounts are quite impressive: it is £1.8 million for North Dorset, which is quite a big deal for a small authority; £3.6 million for Watford; £8.6 million for Durham, which would do very well; and Milton Keynes would be better off to the tune of £16.5 million. It is a fairly big chunk of money to encourage people to build.

Q310 Bob Blackman: Clearly, you have set an incentive but, to come back to my earlier question, do you have an estimate of how many properties would have been developed if the New Homes Bonus was not introduced?

Eric Pickles: When you move over to this system it intensely becomes one of local decisions and local housing needs. There would have been a time when I might have been asked—not particularly by you, Mr Blackman—about the number of Allegros coming off the production line at British Leyland; or you might want us to have a Regional Spatial Strategy for the number of iPhones available within a particular region. No doubt there would then be discussions about whether there were enough pink iPhones going out, or why they were all white, or all black or whatever. We believe this is something that belongs fundamentally to the local community, and for local communities to be able to meet their housing needs, not on the basis of serendipity but on the basis of working out a housing plan and making sure there is a five-year supply of housing, but we are pretty confident that the kinds of pressures that exist will bring the numbers.

Q311 Bob Blackman: Is it correct that it was your ambition to have 150,000 homes built in four years?

Eric Pickles: That is indeed what we intend to build in terms of affordable housing.

Q312 Bob Blackman: I think the issue before us, which has been the basis of evidence from witnesses who have come before us, is that the incentive is not sufficient to produce the properties.

Eric Pickles: I can only assume that the good people before you have not looked adequately at their abacus to realise. If you turn to Milton Keynes, and say over six years you can have an extra £16.5 million, and if you build more you can get additional sums of money. You are a very distinguished former leader of a local authority. If you will forgive me for saying so, you would have been jumping up and down with excitement at the prospect of that kind of money.

Q313 Bob Blackman: When you came before us previously together with the Housing Minister we sought to find out whether you would increase the incentives and what you would do if they did not work. I think his reaction was that you could increase it a little, but obviously there is a finite limit to how far you can go. What will you do if the bonus does not work and does not produce the volume of homes that you expect?

Eric Pickles: We are very confident that it will work. If you forgive me, I don't want to undermine the policy by suggesting an alternative. I think human nature and our consultation with local authorities suggest that, as part of an overall package, this is a considerable inducement to build. I suspect that at some stage you will want to talk to us about affordable housing and the like. We are trying to create conditions whereby housing associations would have an attractive package to build. We are trying to move with the market. There are limits to what government can do in terms of the supply side, but we have always tried to move with the flow of the market. I think these reforms have the advantage of doing that, whereas the old system merely ignored the market.

Q314 Bob Blackman: What will you do if the New Homes Bonus succeeds beyond your wildest expectations, it is tremendously successful and many more homes are built? Where does the money come from?

Eric Pickles: I would be very happy about that, Mr Blackman. We have put together a way in which we can encourage private capital to see housing as a good investment. This merely encourages local authorities to build. Our reforms with regard to affordable housing are about encouraging providers of affordable housing to have a system where it makes sense for them to build, not just manage. In addition, you are aware, because we have talked about this separately, that I am very keen to get some of the advantage that exists on the continent for social, affordable housing, to create a vehicle in which institutions can invest, because that is the one thing missing from what we are doing at the moment.

Q315 Chair: To bring you back to the point and the response to your last visit here, no Government wants to contemplate failure particularly at the beginning of its session in power, but the Housing Minister was very clear last time that if the level of the New Homes Bonus didn't generate more homes than were being built before the recession—because the aim of the Government is to build more homes—the alternative of increasing the size of the incentive and increasing the size of the bonus would be one for government at least to consider and probably would be the plan B, as we discussed. Do you now resile from that and move back from that position? I recognise you believe that your bonus will work, but if it doesn't what is the option?

Eric Pickles: I am a fervent believer, Mr Betts, that our new bonus system will work. If it doesn't work that will be a matter for the Prime Minister, the Chancellor and whoever holds my particular office.

Q316 Chair: Because normally Secretaries of State have moved on by the time their policies come to work, or not.

Eric Pickles: I was thinking more in terms of summary execution. We have put together what we believe will work. The early indications from authorities in terms of them beginning to get into gear for producing plans are very encouraging. The Planning Inspectorate have never been busier in getting these things together. I would much rather the Planning Inspectorate took a lot of time on this kind of thing than having to act as a local planning authority themselves and produce development by a process of appeal, which I do not think is terribly helpful.

I recognise that people hold on to it. Some time ago in Birmingham, I attended a meeting of my own party's planning spokesmen in which a leader stood up and made an impassioned plea for the Regional Spatial Strategies. He said, "Eric, we must retain them." When I asked why he said they did not like passing things; they much preferred to turn it down and for me to pass it later on. It makes you wonder why they are in politics. I think this can invigorate planning and local ward members. There is something quite exciting about being able to determine your community. Pretty soon, when we produce the whole Bill, we will see how far we are prepared to go in terms of planning to work with local communities.

Q317 Simon Danczuk: You talked earlier about the need for a bottom-up approach and for local consent and local people to be rewarded. Does this mean that the community affected by the development will get the New Homes Bonus money directly? It will not go to the local authority into a non-ring-fenced pot; it will go directly to the community affected.

Eric Pickles: I think what you mean is "free of resource equalisation". Yes, it will go free of resource equalisation. My reference to local neighbourhoods related to CIL—the community infrastructure levy. This will be split between the district and the county. You have seen from the consultation document that we are looking at an 80-20 split. As to how local authorities apply that, they come to an arrangement with a community. If you as a Member of Parliament can broker a deal, as I am sure you are very capable of doing, then they have the flexibility to be able to deliver that.

Q318 Simon Danczuk: Is it right that you put the money down to the community that has the development?

Eric Pickles: Absolutely, yes.

Q319 Simon Danczuk: So, the local authority has the choice to do that?

Eric Pickles: Yes. I think it will become clearer once the Bill is produced. The Bill is an integral part of what we are doing.

Q320 Simon Danczuk: Local authorities already have targets to build so many homes in their local plans, in the development framework or whatever. Why give them the money now for what they have already promised to deliver?

Eric Pickles: I suppose that given my nature as a member of the Coalition I want to speak to them through their wallets.

Q321 Simon Danczuk: This is a very difficult time, Secretary of State.

Eric Pickles: But we need houses. The promises we got were not the kind you could take to the bank. Mr Blackman said that we simply haven't built many houses; 1924 was the last time we managed to put these kinds of houses together. I want to be clear that I do not think that is entirely the fault of the Government; it has a lot to do with the state of the market, availability of mortgages and the like. But I need to give them an incentive which says: "If you pass these plans and get them built you will get fairly substantial sums of money which is free of resource equalisation". Therefore, if you are a floor authority the money is not immediately siphoned away. I suppose the good news with regard to the settlement is that not all authorities are now floor authorities.

Q322 Chair: You say that local authority leaders ought to be jumping up and down with joy at the prospect of this money.

Eric Pickles: I may have used a little artistic licence, Mr Betts.

Q323 Chair: It is most unlike you, Secretary of State. One witness who came before us earlier, the Leader of Hampshire County Council, said that the amount of money for the county and all the districts in Hampshire from the New Homes Bonus was about £10 million a year. He suggested that it was not much of an incentive for anyone to do anything—that the problem was not really lack of planning permissions but lack of money in infrastructure and that this would make no contribution to that at all.

Eric Pickles: If my old friend Ken will forgive me for mentioning it, I think he forgot to multiply it by six, so it is £60 million, if indeed that is right. £10 million a year is not to be sniffed at. You will recall that there is now the possibility of TIF with regard to major infrastructure planning. By itself, it is just one small part of a whole series of things we are putting together, but in order for it to work properly we need to give notice to local authorities that dwellings they pass now qualify for this bonus. In a way, we are trying to get things ready for when the new system comes out to make a difference.

Greg Clark: Mr Betts, you refer to infrastructure. We made an announcement last week that we were consulting on an arrangement to confirm the CIL arrangements to make them more flexible so an explicit proportion of that money goes into neighbourhoods precisely to address the question that I understand Mr Thornber raised.

Q324 Bob Blackman: Obviously, one of the key concerns of witnesses who have come before us is that the effect on housing supply is more to do with the availability of mortgages than anything else and that is affecting the market. What incentives are you thinking of to enable local authorities to get the houses built other than a financial incentive? All that does is give planning permission; it does not mean that the houses will be built.

Eric Pickles: They get nothing if they grant planning permission and do not build the houses. That is the beauty of it. You could meet your targets by granting planning permission but nothing much happened. What we are saying is, "Give permission and build the house and it's only on completion that it happens." You will be very well aware how difficult it is sometimes for that completion to go through, so there is a vested interest in ensuring those houses are built.

Q325 Bob Blackman: Do you contemplate potentially reducing the amount of time for which planning permission is extant before it must be applied for again?

Eric Pickles: I was a council leader. We were as keen as mustard, as I am sure was Mr Betts, to get through permissions for developments. The limits are meant to be about the maximum time. Certainly, in terms of new housing and bringing in new business a good planning authority should be able to change things round very quickly, and under this system they will have an incentive to do so.

Q326 Bob Blackman: But clearly a developer can apply for planning permission from a planning authority, get it and then sit on it for a number of years. Is there not a case for saying "Let's reduce the length of time they can do that"?

Eric Pickles: We are making some changes with regard to planning permissions, particularly with regard to retrospective planning permissions and the like. We are just a couple of weeks away from making those announcements and it is important that we inform the House as a whole about that, if you will forgive me. On the general point, this is about encouraging the system to deliver completions. You are quite right to say that the major factor is the availability of mortgages. I know that the Financial Services Authority have published a consultation document on mortgages. I believe that consultation closed last week. I shall look with great interest at what they say with regard to mortgages and their regulation.

Q327 Chair: When the NHBF came to see us last time they indicated that they expected some of their members, who had planning permissions round the country that were not being developed at present because of the economic climate, which we all understand, might well take steps to protect them by starting a little bit of work on site. They would not build any great number of homes but they would avoid the necessity to reapply under any newly-formed local plans, because they were concerned that local plans might be more restrictive on house building numbers than they are currently.

Eric Pickles: We would look at it very carefully if that was the case, but I am sure you understand that that kind of thing used to happen under the old system, under Regional Spatial Strategies, and might happen under what we are doing under the new system. We have tried to effect those things that we can effect. The changes in the markets are such that the availability of banks to lend is crucial, as you rightly pointed out in your introduction.

Q328 Chair: The current incentives to local authorities to get homes built, which really means giving planning permission—because that is all they can do in many cases, apart from looking at infrastructure issues—will not necessarily work because of the market climate. There are lots of extant planning permissions around the country that are not being taken up at present. Therefore, if government look to incentivise, given that local authorities do not build the houses, why were schemes like Kickstart abandoned? Why hasn't some money been put into that at present to get some houses built, because that is the only incentive that would really work in the current climate, is it not?

Eric Pickles: It comes back to the general economic position. I don't want to make petty political points, but we arrived with a £1.5 billion programme from the previous Government and there was nothing to pay for it. What we tried to do was put together a package that was worth £1.25 billion virtually on air to be able to do things. The whole question is: what is available and what's possible? We recognised that the old system with regard to building social housing simply wasn't working and would have cost an enormous investment beyond any government to produce. We tried to create something that would be attractive, in terms of the market, to attract private investment in order to expand affordable housing as I explained a little earlier, Mr Betts.

Q329 Chair: Is there any concrete evidence anywhere to demonstrate that the New Homes Bonus would deliver more homes, or the required amount of homes?

Eric Pickles: What evidence we have, Mr Betts, is unarguable: the present system was a failure; in the number of houses it produced the system was a mess. The present system was there purely to delude Members of Parliament and Ministers that they were actually doing something. The New Homes Bonus is at least an honest attempt to change that.

Q330 Chair: Is it evidentially based? Is there a document or some actual research you can present to the Committee which would convince all of us that this is the right way forward and it will work?

Eric Pickles: I hope my charm might have worked its magic on you, Mr Betts.

Chair: So, we are relying on your charm, Secretary of State? Okay.

Q331 George Hollingbery: Briefly, Secretary of State, leaders' boards were instructed to ensure that the data they collected to design the RSSs and the strategies within them was held by third parties or themselves; some arrangements were made. I think that at the same time it was left in the hands of local authorities to ensure that data was kept up to date. Is that still the position? If so, how can we guarantee that strategic level data will be accumulated and used appropriately?

Eric Pickles: We are very content for local authorities to collect that information that is important to them. We will continue to produce national indices to help them in that process, but leaders' boards existed before and had the ability to bring authorities together to retain that information. We are confident that they will continue to do so.

Q332 George Hollingbery: We received evidence that some of the numbers produced by central government could be as much as two or three years out of date. Although it is slightly separate from this argument, for grant purposes that could make it very inconvenient for local authorities to encourage more housing in that they would end up with less grant for two or three years than they ought to have. Is that a factor?

Eric Pickles: That is why the New Homes Bonus is so important, because it is about actual dwellings that have been completed. We are very confident that local authorities will collate the information that is necessary for them to fulfil their function. We are trying to get away from prescribing, and over-prescribing, the kind of data that it is necessary to keep.

Q333 George Hollingbery: If local authorities do not do so presumably the sanction is that house providers or builders could produce their own data and have it assessed by the Planning Inspectorate, and the authorities would be found wanting in their evidence?

Eric Pickles: It is my experience of local authorities that they are very willing to collect and retain information that is important to them. The reason why they were mildly miffed with the previous Administration was that they felt they were being forced to keep information that was of no use to anybody. I have a certain degree of sympathy for them on that point.

Q334 Chair: Is it not good practice to try to ensure that where authorities make an assessment of need there is some consistency in the methodology used from one authority to another? Do the Government believe it is no part of their role to provide guidance in that regard to try to ensure that authorities have a common approach to this?

Eric Pickles: We are working very closely with the Local Government Association. I am very confident that without the need to legislate or bother them, local authorities between them will be able to put together this package in a sensible way. I do not think this is something that the Mother of Parliaments should prescribe.

Q335 David Heyes: To seek clarification of a particular point, the major infrastructure planning unit is to be located within the Planning Inspectorate. Is it the case that as part of its role it will have responsibility for the supply of aggregate minerals and planning for waste? Perhaps I may ask Katrine Sporle.

Eric Pickles: I ask my colleague to give a political response and then Katrine can come in.

Greg Clark: In looking at the arrangement for the IPC we were pressed by some to change the remit. What we have decided to do in the interim is keep the present remit and limits, but we will keep an eye on that to see whether we want to change it. Katrine is in charge of making the transition, and she may want to add to that.

Katrine Sporle: My difficulty in answering this question is that I have not seen the clauses in the localism Bill. I am aware that the major infrastructure unit is something you want to transfer. I await the clauses in the localism Bill to see exactly what powers are transferred. It wasn't my understanding that minerals and waste would move from the current jurisdiction because they are covered under development plan work and are already in preparation by first tier authorities.

Q336 David Heyes: My understanding of the White Paper is that paragraph 322 and, in particular, paragraph 323 relate to minerals and planning for waste. It is clear that responsibility for that is intended to be located in the major infrastructure planning unit. Is that still the case?

Greg Clark: We have not taken a view on whether they will end up there. What we have said is that initially for the transitional arrangements while the Bill goes through, the new unit will operate on the basis of the present arrangements, but we will be looking at that and will review it.

Q337 David Heyes: I am a little concerned because in earlier evidence the Secretary of State said that no email had been issued to rescind any part of that proposal in the White Paper. That's not my understanding of the situation. Is that something you can clarify for us?

Eric Pickles: To err is human. Can I clarify that there was an error in the White Paper? We are very sorry. We will be seeking to clarify that. It is suggested in the White Paper that this would go to the inspectorate; it's not.

Q338 David Heyes: Secretary of State, is this the first time you are aware of that?

Eric Pickles: You have managed to drag it out of me. To tell you the truth, up to about 30 seconds ago I had no idea.

Q339 David Heyes: It's a bit disappointing, isn't it?

Eric Pickles: No.

David Heyes: You must be disappointed.

Q340 Chair: The Secretary of State is fallible.

Eric Pickles: I am fallible; I cannot apologise enough. I had not picked it up from my intensive reading of the White Paper. I am just so sorry.

Chair: The first of many mistakes. No. Obviously you won't admit to that. Secretary of State and Minister, thank you very much indeed for your time this afternoon; we appreciate it.

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