Levelling-up and Regeneration Bill

Written evidence submitted by the Mayor of London (LRB13)

Levelling-up and Regeneration Bill

House of Commons Committee Stage

1. Summary

1.1 This Bill undermines the Mayor of London’s key planning powers.

1.2 These powers have been used in recent years to deliver more genuinely affordable housing and go beyond national requirements to tackle the climate emergency.

1.3 If enacted in its current form the Bill would represent a scaling back of devolved powers to London and a general centralisation of power.

1.4 This is a marked departure from the localism agenda that would also disenfranchise local communities who will be shut out of planning.

1.5 The Mayor and the Greater London Authority are concerned that no representatives from London were afforded the opportunity to give oral evidence to the Public Bill Committee given the direct impact of the Bill’s provisions on the capital.

2. Overview

2.1 The Mayor of London is determined that our capital city plays its role in helping to level up parts of the country that have been left behind for too long and he therefore welcomes the introduction of the Levelling Up and Regeneration Bill (LURB).  

2.2 When London succeeds the rest of the country benefits – and vice-versa. That is why the Mayor is committed to working with the Government, other regions and business, to help level-up London and every other town, city and region in the UK.   

2.3 However, if the Government is to succeed with its mission, it must recognise that levelling up the UK must not be about levelling down London and withholding the funding and investment our capital city desperately needs. London has some of the most deprived communities in the country and they deserve support and funding just as much as other parts of the UK. 

2.4 Nor must it be about disenfranchising local communities, undermining independent scrutiny and encouraging poorer planning decision-making that has less regard to local concerns, all of which are the consequences of the Bill as currently drafted. 

2.5 The Mayor is deeply concerned that the Bill risks seriously undermining the Government’s flagship levelling up policy by rolling back London’s strategic planning powers that will stifle innovation and progress – including on areas such as net zero, fire safety and housing delivery - and result in turning back the clock on good planning policy by decades. 

 

2.6 Such a lowest common denominator approach risks shifting focus away from agendas that matter both locally and nationally - including fixing the housing crisis, tackling climate change and biodiversity loss and improving air quality.   

2.7 London is the UK’s leading global city and is pivotal for the Exchequer and the UK’s future prosperity. That is why disinvestment in London hurts the country. Our capital city plays a unique role in driving innovation and jobs across the country, and our ability to shape our own planning policy – to deliver the infrastructure, workplaces and housing that we need - is a critical component of our success. These strategic powers help to maintain London’s status as a top tier global city that continues to attract investment, tourism, students and talent from around the world, whilst supporting jobs and growth across the country.  

3. Overview of key areas of the Bill

Part 3, Chapter 2: Development Plans and National Policy

3.1 The Bill proposes to introduce (Clauses 82-84) new centrally produced planning policies - National Development Management Policies (NDMPs).

3.2 Any conflict between NDMPs and local plans will be decided in favour of NDMPs, effectively circumventing local policies whenever an NDMP is in place. These would be determined by the Secretary of State of the day, potentially marginalising local policies, in a marked departure from the localism agenda.

3.3 This effectively unfettered centralisation of power is not accompanied by accountability through mandatory and prescriptive forms of consultation, nor checks and balances on the content of any new NDMP. This lack of due process and public scrutiny will only serve to further disenfranchise communities, and disincentivise engagement on local plans and investment in neighbourhood planning. 

Impact on the London Plan

3.4 London’s devolved strategic planning powers have been highly successful over the last two decades. Since the first draft London Plan in 2002, successive Plans have facilitated a step-change in the planning of the UK’s only global city. London has led the way in planning policy approaches – such as the suite of policies tackling climate change and biodiversity loss, fire safety, improving air quality, and increasing and speeding up affordable housing delivery, to name but a few.  

3.5 Furthermore, strategic planning for London has been pivotal in securing buy-in, support for significant investment in, and financing of, transport and other infrastructure such as the Northern Line and Barking Riverside extensions, opening up brownfield sites to deliver over 36,000 homes and 20,000 jobs. The results speak for themselves: since the creation of the GLA, annual net housing supply has doubled, and new homes in London lead the country in terms of energy efficiency and design quality. 

3.6 The Bill risks these innovative policy approaches being curtailed or blocked. The Mayor is calling for protections for these powers, which deliver good planning for London and serve to benefit the country as a whole when successful pilots are adopted elsewhere.   

3.7 Proposals in the Bill (Clauses 85, 86) place significant additional restrictions on the preparation of future London Plans, not only risking its future role in the good planning of London, but adding further complexity to the plan-making process.

3.8 As with local and neighbourhood plans, provisions relating to NDMPs would override London Plan policies. For example, NDMPs on energy and environmental performance of new buildings could stop the application of more stringent policies in the London Plan which are currently being delivered.

3.9 The extensive new restrictions on the application of devolved Mayoral powers also apply to new Supplementary Plans, proposed in the Bill. For example, London’s highly successful ‘fast-track’ approach to delivering affordable housing, which  has more than doubled the average percentage of affordable housing (by habitable room) for schemes referred to the Mayor, would be precluded by the unnecessarily restrictive criteria for producing a Mayoral Supplementary Plan. 

Part 4: Infrastructure Levy

3.10 The Infrastructure Levy (IL) proposed in the Bill would result in more complex and less effective arrangements than the current system.  It would result in less affordable housing and infrastructure (including transport and social infrastructure), whilst putting less viable developments at risk.

3.11 Including affordable housing within the scope of the IL means that rates would need to be many times higher than the Community Infrastructure Levy (CIL). Setting rates at the level needed to maintain current levels of affordable housing would make less viable developments undeliverable. Conversely, setting lower rates will reduce contributions and therefore benefits to the community.

3.12 The detriment of reduced affordable housing delivery is well-documented. This would undo years of progress, undermining the government’s efforts to create more sustainable, high-quality neighbourhoods as part of the levelling up agenda.  

3.13 Instead of getting payments when development starts, payment will be delayed until a later stage and based on development value. This means infrastructure will not be in place when needed, resulting in more opposition to planning proposals; there will be greater uncertainty for councils, developers and communities about the final value of payments; and there will be greater risk for councils who may have to repay Levy receipts if a scheme’s value is lower than expected. This would be exacerbated if councils have borrowed against expected future payments to deliver the infrastructure alongside the development.

3.14 Although S106 agreements will be used for ‘large sites’, if councils are unable to charge CIL, all infrastructure contributions would be subject to S106 negotiations rather than the current blend of S106 and CIL, adding complexity and delay.   

3.15 Restrictions to S106 agreements wouldn’t allow off-site mitigation measures and may prevent other obligations such as local employment and training measures, affordable workspace, construction monitoring or carbon offsetting.  Strategic and upper tier authorities may not be able to secure contributions to address the impacts of development by improving the capacity of public transport and other infrastructure to support growth.  

4. Appendix: Further detail on key areas of concern

Impact of changes to the basis of decision making – S38(6) and the addition of National Development Management Policies 

 

4.1 Changes proposed to Section 38(6) of the Planning and Compulsory Purchase Act 2004 subvert the role of local planning policies and neighbourhood plans in favour of centrally produced policies - National Development Management Policies - (’NDMPs’). This change is badged as providing more certainty, but will reduce the weight of local and neighbourhood plan policies as well as other material considerations – making for a less flexible system, which has less regard to locally important concerns and ultimately, poorer decision-making.

4.2 The elements of a development plan (together with the ability to consider ‘material considerations’) currently provide a framework for decision-makers to undertake ‘the planning balance’ which underpins sound decision-making. However, NDMPs would be elevated above and therefore override the development plan, resulting in a loss of the framework that exists to provide requisite checks and balances. The Bill suggests an unfettered power in practice, centralised with the Secretary of State of the day, with no recourse should unwelcome or unworkable NDMPs come forward in the future. 

4.3 NDMPs contain no requirement to be: capable of implementation for development management purposes; consistent with wider government policy, other NDMPs or the National Planning Policy Framework (NPPF); take account of national, regional or local net zero targets; justified; capable of being applied nationally; or consistent with the overarching economic, social and environmental objectives which have come to form the basis of sustainable development.  

4.4 Because any conflict between NDMPs and the development plan will be decided in favour of NDMPs, this effectively removes the development plan from consideration, irrespective of whether it would result in a better decision. The result would be more decisions taken in line with a centralised agenda and which marginalise local policy objectives if these conflict with the national policy aims. This is clearly a marked departure from the localism agenda.

4.5 This centralisation of power is not accompanied by accountability through mandatory and prescriptive forms of consultation and engagement on NDMPs. Unlike with development plans, there is no mandatory requirement to consult on the wording of the NDMPs; undertake a meaningful and iterative process; publish documentation such as supporting evidence or strategic environmental and equality impact assessments; or for a process of independent scrutiny. This lack of assessment and public involvement will only serve to further disenfranchise communities, and disincentivise engagement on local plans and investment in neighbourhood planning.

Restrictions on the London Mayor’s devolved planning powers 

4.6 London’s devolved strategic planning powers have been highly successful over the last two decades. Since the first draft London Plan in 2002, successive Plans have facilitated a step-change in the planning of the UK’s only global city. London has led the way in planning policy approaches – such as the suite of policies tackling climate change and biodiversity loss, improving air quality, and increasing and speeding up affordable housing delivery, to name but a few.  

4.7 Furthermore, strategic planning for London has been pivotal in securing buy-in, support for significant investment in, and financing of, transport and other infrastructure projects of a magnitude that simply would not have been possible without it such as the Northern Line and Barking Riverside extensions, opening up brownfield sites to deliver over 36,000 homes and 20,000 jobs. The results speak for themselves: since the creation of the GLA, annual net housing supply has doubled, and new homes built in London lead the country in terms of energy efficiency and design quality. 

4.8 Proposals in the Bill mean these innovative policy approaches, driven by the London Plan, are at great risk of being curtailed or blocked at the discretion of the Secretary of State of the day. The Mayor is therefore calling for protections for these powers, which serve to benefit the country as a whole, when innovative approaches that are piloted in London, can be rolled out elsewhere if they prove to be successful.   

4.9 The Mayor is unequivocal in his support for greater devolution for fellow combined authority mayors and notes that the Levelling Up White Paper committed to further devolution for local leaders. However, centralising and watering down planning legislation as proposed in the Bill risks undermining what the Government is seeking to achieve.  

4.10 These concerns are not matters for London alone. A curtailment of ambitious planning approaches would disbenefit the country as a whole as it encourages a ‘lowest common denominator’ approach that fails to deliver on local and national agendas that matter most. For example, London was the first major city in the UK to have a zero carbon homes and commercial buildings standard for new development made possible through the London Plan. London has required improvements over Part L of the Building Regulations (energy performance of buildings) towards net zero, since the 2011 London Plan, changes which are crucial in supporting the Government to deliver its commitment to achieve net zero by 2050. As a result of our innovative policy approach, we secured carbon savings 46% above National Building Regulations in 2020.  

 

Impacts of the Bill on the London Plan 

 

4.11 The Bill puts unnecessary and unwelcome restrictions on the scope of the London Plan as set out below.  

 

4.12 The changes proposed limit the London Plan to only  those matters that are expressly allowed.. This is significantly more prescriptive than the current statutory provisions and limits scope for future innovation and ‘piloting’ of approaches as outlined above. There is a concern that future regulations may impose yet more limitations on what the London Plan may or must contain. 

4.13 Proposals in the Bill mean the Mayor may only bring forward policies which are:  

o of strategic importance to Greater London – with this no longer a decision for the Mayor, but one that must be demonstrated (perhaps objectively) as of importance to two or more boroughs; and 

o which relate to the ‘particular characteristics or circumstances of Greater London – which could arguably restrict London policy approaches to matters that do not apply in other urban conurbations or other densely populated areas. 

4.14 This could reframe the content of any London Plan from policies required for the good strategic planning of London, to policies about matters that are only relevant in London – which in practice could preclude many policy matters that may also be relevant to other urban areas for example. 

4.15 The Bill removes the link with the Mayor’s other statutory strategies, so the London Plan is no longer required to set out spatial policy in relation to these strategies. This will have far-reaching consequences for securing investment and strategic coordination over multiple authorities for transport, economic development, health inequalities, housing, the environment and culture, simultaneously weakening the status and deliverability of these statutory strategies to a ‘wish list’, with significantly reduced scope for implementation. 

4.16 There is explicit provision preventing the London Plan from being inconsistent with or (in substance) repeating any National Development Management Policy. Again, this potentially narrows the scope of London Plan policies (to an as yet unknown extent). For example, NDMPs on heritage might potentially preclude London Plan policies protecting the Westminster World Heritage Site. 

4.17 The significant, new legislative constraints, coupled with internal contradictions within the Bill, are likely to significantly complicate and extend the plan-making and the examination process and there is a lack of clarity about what the London Plan can contain given the narrow parameters of the Bill. These matters are in addition to the tests of soundness in the NPPF, which already provide a framework for scrutiny of the Plan.  

4.18 While the Bill provides for the Mayor to prepare Supplementary Plans, these are highly circumscribed, limited to matters relating to design requirements, and only in relation to the determination of planning applications. For example, the Mayor is at an unnecessary disadvantage compared to the matters Local Planning Authorities (LPAs) can cover in their Supplementary Plans.  LPAs and the development industry currently rely on broader London planning guidance, supporting plan-making by providing ‘off-the-peg’ approaches and including detail on matters such as affordable housing that would be unwelcome in a spatial development strategy but significantly speed up the planning process. While a Mayor could continue to introduce guidance through general powers as is currently the case, the weight of that guidance would be downgraded through the changes to section 38(6) and this would be a missed opportunity to utilise these new powers to best effect for the planning process.

4.19 For example, the ‘Threshold Approach’ to affordable housing, was introduced through the Mayor’s Affordable Housing and Viability Supplementary Planning Guidance in 2017.   Now part of the London Plan 2021, the approach has incentivised developers to provide significantly greater affordable housing levels by enabling schemes to follow a 'Fast Track Route' where they provide the relevant ‘threshold level’ of affordable housing.  This has also sped up the planning process by avoiding the need for protracted viability debates. In 2021, 61 per cent of eligible schemes referable to the Mayor followed the Fast Track Route, up from 38 per cent in 2019. Over the same period, the average percentage of affordable housing (by habitable room) per scheme referred to the Mayor and approved increased from 39 per cent to 45 per cent. This has more than doubled from 21 per cent in 2016 demonstrating the impact of effective local planning policy and the Mayor’s powers relating to strategic applications.  

 

 Part 4: The Infrastructure Levy 

 

4.20 The Infrastructure Levy (IL) proposed in the Bill would result in more complex and less effective arrangements than the current system.  

4.21 The IL would result in less affordable housing and infrastructure (including transport and social infrastructure), whilst putting less viable developments at risk. Including affordable housing within the scope of the IL means that rates would need to be many times higher than the Community Infrastructure Levy (CIL) (which only deals with infrastructure and is a small proportion of development value). Setting fixed rates at the level needed to maintain current levels of affordable housing would make less viable developments undeliverable. Conversely, setting lower rates will reduce contributions. In practice both are likely to occur.  

4.22 The Bill only requires charging authorities to ‘have regard’ to the ‘desirability’ of ensuring that the level of affordable housing and funding is maintained. Rates will also be subject to viability testing and independent examination. This is likely to result in ‘lowest common denominator’ rates, fewer affordable homes and reduced infrastructure delivery.  

 

4.23 The detriment of reduced affordable housing delivery is well-documented. This would undo years of progress, undermining the government’s efforts to create more sustainable, high-quality neighbourhoods as part of the levelling up agenda. The Bill also makes no provision for ensuring the re-provision and delivery of additional affordable housing in estate regeneration schemes.  

 

4.24 Delaying payments from implementation to a later stage in the development process and basing on development value will have the following impacts: 

 

o The infrastructure required to support development will not be in place when needed. This would put greater pressure on local facilities such as health centres and schools and result in more opposition to planning proposals.  

 

o Many authorities will be reluctant or unable to borrow against uncertain future receipts and will not have the capacity or skills to deliver upfront infrastructure to support development.  

 

o Greater uncertainty for councils, developers and communities as the final value of the IL payment is not known until the end of the development process, many years after the original grant of permission. This makes it harder for developers to take decisions on investment and land values, more difficult for LPAs to understand whether impacts will be addressed and makes the direct benefits of development less proximate and therefore tangible for communities.  

 

o The IL transfers risk from developers to LPAs who may have to repay Levy receipts if a scheme’s value is lower than expected. This risk will be heightened for any authorities that have borrowed against expected receipts who will also incur additional finance costs. 

 

 

o There would be insufficient flexibility to secure the right mix of on-site and off-site measures to make development acceptable. 

 

o Unlike the successful ‘fast-track’ system in London, several valuations would be needed for almost every scheme which would be complex, time consuming and contentious. 

 

4.25 Although S106 agreements will be used for large sites (what constitutes a large site is has not yet been defined), if boroughs are prohibited from charging CIL, all infrastructure contributions would be subject again to S106 negotiations, adding complexity and delay to the planning process.   

 

4.26 Restrictions to S106 agreements would prevent authorities from securing off-site mitigation measures and may be prevented from securing a range of other obligations such as local employment and training measures, affordable workspace, construction monitoring or carbon offsetting – measures that are needed to deliver objectives such as London’s net zero carbon target and delivery of the necessary carbon reduction projects. The retention of Mayoral CIL is welcome, however strategic and upper tier authorities may not be able to secure S106 contributions to address the impacts of development by improving the capacity of public transport and other infrastructure to support growth.  

 

4.27 The Bill indicates that regulations may allow for the IL to be used for purposes other than infrastructure. If these are unrelated to development, this will undermine the capacity of areas to accommodate growth sustainably as well as community support for development.  

 

5. Provision for empty high street premises 

 

5.1 The Mayor is broadly supportive of fresh ideas for reducing vacancies and giving local authorities the power to be more interventionist and he welcomes the focus on creating opportunities to facilitate more community-led experimentation. 

5.2 However, he is concerned about unintended consequences such as landlords, faced with impending vacancies, changing to residential or undesirable uses, in order to avoid the threat of an auction.  The Mayor is clear that a more effective framing of the relevant clauses in the Bill would better focus intervention towards uncooperative landlords or vacant premises which cause a specific problem such as blighting the high street.   

5.3 The Mayor has also heard concerns from partners about resourcing and implementation. The Bill’s aim for a 6-month process from start to finish would prove challenging for local groups to engage with the process and be unachievable by many local authorities who are simply not adequately resourced to deliver this, nor to deliver effective enforcement within current resources. This could lead to the more difficult to engage absentee landlords getting an easier ride and potentially undermine local partnership working. 

For more information, please contact Leigh Greenhalgh, Principal Government Relations Officer at leigh.greenhalgh@london.gov.uk

July 2022