Joint Committee on the Draft Gambling Bill

Joint Committee on the Draft Gambling Bill First Report

5 The Planning Process

66. The Government's policy objective of limiting the number of premises with Category A machines depends to an extent on limiting the number of regional/leisure destination casinos. The Joint ODPM - DCMS Statement on Casinos sets out the Government's approach to the planning policy with respect to regional/leisure destination casinos. The planning policy provides for Regional Planning Bodies (RPBs) to determine suitable locations for regional/leisure destination casinos through their Regional Spatial Strategies (RSS). In so doing they will have to have regard to the broad policy context set out in Planning Policy Guidance 11 (soon to be replaced by Planning Policy Statement 11) which requires the RSS to "establish the locational criteria appropriate to regionally or sub-regionally significant leisure uses, or to identify the broad location of major new leisure developments". [83]

67. While the Committee welcomes the Joint Statement and the attempt to clarify the issue of how and where regional/leisure destination casinos will be located, we are not satisfied that the Government's policy is sufficiently clear, or that it satisfactorily addresses the potential problems we identified in our original report. These include determining the location of regional/leisure destination casinos, issues arising from the D2 Use Class and grandfather rights, and the mechanism for achieving regeneration benefits. Addressing these issues is paramount not only to provide clarity to the parties involved but most importantly to ensure that the planning process assists in meeting the Government's objective to restrict the number of premises with Category A machines.

68. As a follow up to the evidence he gave to the Committee on 8^th July, the Minister for Housing and Planning wrote to the Committee on 12^th July, providing further details of the Office of the Deputy Prime Minister's policy on regional/leisure destination casinos. The letter reinforces the Committee's concerns that planning issues relating to regional/leisure destination casinos are inconsistent with the policy objectives of the Department for Culture, Media and Sport, supported by the Committee, of protecting the vulnerable and securing the regeneration benefits associated with major casino developments.

69. The Office of the Deputy Prime Minister's planning guidance envisages that regional/leisure destination casinos will be located in town centres and that any exceptions to this are likely to be called in. Simultaneously, the professional advice we received in terms of problem gambling states that town centres are wholly inappropriate locations for regional/leisure destination casinos. We strongly urge the Government to rethink its policy in this area and to pay proper regard to the evidence given to this Committee about how best to secure the Department for Culture, Media and Sport's policy objectives for casino developments which this Committee supports. The Minister's letter is attached as Annex 1.

Determining the locations of regional/leisure destination casinos

70. The Government's proposal to assign a key role to RPBs has been broadly welcomed. London First "welcome clarification on the role of RPBs in setting regional strategy for casinos".[84] MGM Mirage Development, Leisure Parcs, and Kerzner International all share this view.[85]

71. While the role of RPBs has been clarified by the Government's latest policy, the mechanism through which they will determine suitable locations for regional/leisure destination casinos is less clear, prompting several requests for further clarity. In oral evidence, Sir Peter Hall told the Committee "I do not think that Government policy […] is sufficiently specific on this point, because it essentially does not say, it does not give any indication where regional casinos are to be located".[86] The South West Regional Planning Body note that "the definition of regional casinos now raises the need for further clarification in policy terms to aid RPBs in determining suitable locations for these developments".[87]

The need for national guidance

72. We have received evidence suggesting that national guidance may be the most appropriate way of dealing with the outstanding issues relating to RPBs. Blackpool Council state that it will be difficult for the planning system to react quickly and consistently without "clearer guidance from Government to Regional Planning Bodies on the priorities they should express in their region specific, casino policies".[88] Sun International believe that national guidance is necessary not only for RPBs, but also for casino developers: "we feel that a clear policy statement from the ODPM regarding, for example, location criteria and required regeneration benefits is essential if the planning system is to provide any form of transparency and certainty to an industry looking to develop casino schemes of a regional scale".[89] The South West Regional Planning Body express a similar view: "we are aware that no national guidance on the location of regional casinos either exists or even is planned in the near future […] given the current policy vacuum on the issue of regional casinos, guidance for RPBs is vital if the emerging RSS is expected to comment on suitable locations for these developments".[90]

73. Prior to the Planning Minister's explanatory letter of 12^th July, the Government had been reluctant to spell out national guidance to RPBs on this issue.[91] However, we consider that regional/leisure destination casino developments are "sufficiently novel and unique"[92] to justify the provision of broad national guidance for RPBs. As we discuss below, we are keen to see the establishment of a Working Group to consider the outstanding planning issues and suggest that considering how national guidance will work out in practice should be one of its key tasks.

Calling in applications

74. Giving RPBs responsibility for deciding the locations for regional/leisure destination casinos raises the potential for conflicts between regions and between regional and local authorities. The Joint ODPM-DCMS Statement on Casinos notes that "where RPG sets out the preferred location(s) for regionally significant leisure developments, and a local planning authority resolves to approve an application for such development elsewhere, the First Secretary of State [Deputy Prime Minister] may call in the application for his own determination". The statement notes that the First Secretary is "selective" in calling in applications but, in oral evidence to the Committee, the Rt Hon Keith Hill MP told us "our anticipation is that early decisions with regard to regional scale casinos are likely to be called in by the Secretary of State".[93] Sir Peter Hall said that he thought this amounted to a new planning principle[94] and that it suggested that "there is somewhere in a drawer a set of criteria for judging these applications, which has not been vouchsafed to anyone, especially this Committee".[95] We do not consider a planning process dependent on the calling in of applications is a satisfactory way to proceed.

75. We have received evidence expressing concern about the First Secretary of State's calling in powers. The Bingo Association is concerned about the "vagueness regarding the right of the Office of the First Secretary of State to call in planning applications".[96] While we acknowledge the Government's reluctance to publish national guidance relating specifically to regional/leisure destination casinos, we believe that it could help to ensure a consistent approach between regional authorities and avoid the need for applications to be called in for determination by the First Secretary of State.

A Plan-led approach

76. The success of a plan-led approach, driven by RPBs, depends on them being able to determine the most appropriate locations for regional/leisure destination casinos through their RSS. Concern has been expressed about the timing of the Gambling Bill and the implementation of RSS and the potential for regional/leisure destination casinos to be developed without due regard having been paid to the RSS. Caesar's Entertainment "are concerned that the regional planning boards are only now starting to consult and develop their regional spatial strategies and it will be many months before these are agreed and published".[97] There are already several plans for large scale developments, as Gala acknowledge: "we are already aware of over 20 current publicly announced proposals for regional sized casinos, even before the Bill is finalised and placed before Parliament".[98] Such a situation could be extremely problematic as it could not only invalidate a region's spatial strategy but could also mean that regional/leisure destination casinos are developed without any regeneration benefits having been achieved. Mr Tim Hill, Director of Planning, Transport and Sustainability at the North West Regional Assembly emphasised the importance of this issue when he told the Committee:

"If the Government is saying there is a role for regional planning bodies to take a plan-led approach to this particular type of leisure development […] then it has to be firm about what happens in the interim. There is a real danger that we are just going to see developments being granted by permission and we may as well give them [the planning permissions] and go home. There is no point in us having a regional strategy if all we do is identify where planning permission has already been granted, so there is a choice to be made".[99]

77. This view was reinforced by Mr Haslam who told the Committee:

"There is this grave danger […] that many decisions will be made outside that plan led approach. If there is a race and planning permissions are given in advance of a regional strategy, many decisions will be made outside the planning system. The opportunities for circumvention, avoiding the planning process, are large, the compulsion to circumvent the planning system to avoid the section 106 agreement and the add-on economic benefits is enormous".[100]

78. When questioned the Rt Hon Keith Hill MP said that this issue could be addressed by calling in applications: "there is likely to be a hiatus period in which there is no regional spatial strategy policy with regard to the location of regional casinos and in those circumstances it may be appropriate for the First Secretary to call in".[101] However, this approach would not address the issue of premises within the existing D2 Use Class converting to casinos, as no new planning permission would have to be sought. This view was confirmed by Ms Judith Saloman, Director of Planning, London First:

"If the existing use is D2, the principle will have been established in planning and therefore the applicant will argue it is only the physical works which are up for consultation and discussion and not the issue of the use".[102]

79. We believe that the Government should, using the proposed Working Group and national guidance, ensure that RPBs make progress on developing their RSS and that clarity is provided on how applications for regional/leisure destination casinos will be dealt with in the interim.

80. The Government's proposals provide for "a huge expansion in the roles and responsibilities" of Regional Planning Bodies. Caesar's Entertainment notes that RPBs will need to be "adequately resourced and have the requisite skills to quickly develop the spatial strategies".[103] The Rt Hon Keith Hill MP recognised that this was an important issue. "We are well aware […] that they will have a lot of work ahead and they will need to be more engaged".[104] Given the emphasis placed on the role of Regional Planning Bodies and the need for them to develop Regional Spatial Strategies as quickly as possible, the Committee believes it is imperative that the Office of the Deputy Prime Minister ensures they will be adequately resourced with the necessary skills and experience to carry out their role.

Town centre locations

81. When deciding the "most suitable areas" for regional/leisure destination casino developments, Regional Planning Bodies will have to take into account Planning Policy Guidance (PPG) 11 on Regional Planning. PPG11 provides advice on developing a strategy for determining the location of regionally or sub-regionally significant development and sets out strategic policies at the regional levels for matters which may apply across regions. Regional Planning Guidance must have regard to regeneration initiatives and identify priority areas for economic development and regeneration. PPG11 notes that the "aim should be to ensure that […] major new facilities, serving a regional or sub-regional catchment, promote the vitality and viability of existing town centres".[105] This suggests that the location of preference for regional/leisure destination casino developments will be in town centres, a view endorsed by the Rt Hon Keith Hill MP, in oral evidence[106] and reinforced by his letter of 12^th July.[107]

82. We have received evidence on the inappropriateness of town centres as locations for regional/leisure destination casinos. Professor Peter Collins told the Committee that "convenience is the single greatest spur to increase problem gambling"[108] and that "from a problem gambling point of view, there is no doubt that it is better not to locate casinos in town centres. There is no question of that".[109] Several submissions have commented on the inconsistency in the Government's approach in taking a hostile attitude to having small casinos on the high street, whilst allowing regional/leisure destination casinos to develop there. The Casino Operators' Association of the UK "is at a loss to understand the hostility by Government to existing small casinos in the towns but makes planning permission arrangements there for Regional ones; both offer the facility for 'casual gaming' which is the quoted reason for restricting existing small casinos, but the scale differential is enormous".[110]

83. Locating regional/leisure destination casinos in town centres not only increases the potential for problem gambling, through increasing "casual" gambling opportunities, but also raises the risk of causing economic harm. According to Professor Peter Collins, a regional/leisure destination casino located in a town centre is likely to displace spending from nearby businesses:

"If you put a large entertainment complex, including a casino, in the centre of a town, you will suck huge amounts of money out of the leisure economy in that town; and this goes against the principle of trying to ensure that casinos, in as far as they displace economic activity, do so from a wide area of relative affluence and concentrate the new spend in areas of relative disadvantage. That is the best way of dealing with the economic redistribution policy. I think that is something which not only is undesirable in itself, but will clearly lead to all sorts of objections from all sorts of businesses to downtown casinos".[111]

84. Locating regional/leisure destination casinos in town centres will usually be at odds with the Government's desire to limit the accessibility of Category A machines. The Joint ODPM-DCMS Statement on Casinos states that "regional casinos offer a destination gambling opportunity which is more likely to minimise repetitive, casual use of machines than if they were located in smaller casinos in high street locations, to which relatively larger numbers of people have access".[112] This is clearly in conflict with the policy objectives driving the Office of the Deputy Prime Minister's preference for such developments to locate in town centres. The Committee is disappointed with the lack of policy coherence in this area and has grave concerns about locating regional/leisure destination casinos in areas in close proximity to where people live and work. While we accept that planning policy is established in line with the Office of the Deputy Prime Minister's wider objectives, we believe that the overriding objective of the Government's proposals in this area should be that of controlling the access to Category A machines by limiting the number of premises that can have them and ensuring, so far as possible, that they are not located in close proximity to residential properties.

Mixed-use developments

85. We have received evidence suggesting that regional/leisure destination casino developments could be part of mixed use facilities. The Mayor of London discusses "seeing casinos as part of mixed-use schemes (including residential elements)".[113] Las Vegas Sands refer to "the new Bramall Lane development, anchored by the casino entertainment complex, will create affordable housing, a 120-room hotel, disabled amenities, conference facilities, [and] a tennis centre".[114] The Rt Hon Keith Hill MP told the Committee that "it is a central aspect of our sustainable communities commitment which is to aid the encouragement and development of mixed use communities".[115] Sir Peter Hall noted that there are risks associated with including gambling facilities in mixed-use developments. "Despite the laudable aim of the Government to have everything mixed up and the housing next door to pubs, clubs and gambling. I think in practice there can be very, very negative effects from these uses in the juxtaposition which would have to be looked at".[116] While we strongly believe that regional/leisure destination casinos should be large scale leisure complexes with ancillary entertainment and cultural facilities we are concerned about the potential for regional/leisure destination casinos to develop alongside housing. Given the concerns about the impact "convenient" and "casual" gambling can have on problem gambling, we do not believe it is appropriate for regional/leisure destination casino developments to contain provision for housing. We so recommend.

D2 Use Class

86. The potential for RSS to be invalidated by new casinos opening before RSS are finalised is aggravated by the placing of casinos in the D2 Use Class. Within the planning system, buildings and areas of land are categorised according to their use. Casinos currently fall within the D2 Use Class: Assembly and Leisure. This Use Class is shared with cinemas, concert halls, bingo halls, dance halls, swimming baths, skating rinks, gymnasiums or areas for other indoor or outdoor sports or recreations, not involving motorised vehicles or firearms. Under the Use Classes Order, where a building or land is used for a purpose within a specified class, its use for any other purpose in the same class does not require planning permission. We have received a great deal of evidence expressing concern about the potential for existing premises within the D2 Use Class, including existing casinos, being converted into regional/leisure destination casinos without the need for new planning permission and without being included in a region's spatial strategy. Added to this is the risk that planning gains will not be able to be negotiated, as new planning permission will not have been granted. Blackpool Council note that "the potential for change of use within the existing D2 Use Class to casino use, without any reference to the planning system is […] a major concern. […] Operators will also be able to expand small casinos into adjoining D2 leisure uses without reference to the planning system and to grow small casinos into regional scale casinos through the premises licensing process."[117] Concern about this issue was also expressed by MGM Mirage Development, Ameristar Casinos, Sun International, Caesar's Entertainment and the Mayor of London.[118]

A separate Use Class

87. Having a separate Use Class for regional/leisure destination casinos has been suggested as a way of addressing this issue. Sun International note that "whilst we are aware of the intention to prevent the potential proliferation of casinos through the licensing process, it is our belief that a change to the Use Class Order, removing casinos from D2 and then either creating a new class specifically for casinos, or designating them sui generis,[119] will provide an extra safeguard to this process".[120] MGM Mirage "propose that the Use Class for 'casinos' should be made sui generis to ensure that applications are reviewed on their merits and to prevent a change in leisure use circumventing the intent of the Gambling Bill".[121]

88. If regional/leisure destination casinos were to be classified as sui generis they would not be the only gambling premises to be classified as such. During our inquiry we learnt that amusement arcades are currently classified as sui generis, prompting Mr Tim Hill to note that "if amusement arcades are sui generis it would be interesting to see that you can go in and put pennies into a machine and everybody need[s] to apply for planning permission for that, but you can go and gamble for unlimited prize money without a change within planning permission".[122]

89. We were encouraged by the Minister's view on this issue. He told us "our minds are certainly not closed on the issue of changing the use class position in respect of casinos, and we are happy to look at that issue in the light of any evidence presented to the Committee […] we are certainly willing to consider categorising casinos as sui generis".[123]

90. The Committee believes there is merit in the suggestion to make all casinos sui generis. We believe that this is particularly relevant in respect of regional/leisure destination casinos. Categorising regional/leisure destination casinos in a separate Use Class will prevent existing premises within the D2 Use Class, including other casinos below the minimum size threshold for regional/leisure destination casinos, from converting to regional/leisure destination casinos without the need for planning permission. This means that regional/leisure destination casinos would not be able to develop without achieving new planning permission and therefore meeting planning obligations. Having a separate Use Class for regional/leisure destination casinos will also help to prevent their proliferation as new developments will have to comply with the policy set out in the Regional Spatial Strategy. We therefore recommend that regional/leisure destination casinos are categorised as sui generis and that the Government consults on whether a sui generis categorisation should apply to all casinos.

Achieving regeneration benefits

91. The regeneration benefits that can be derived from large scale casino developments are well documented. In order to ensure that local and regional planning authorities were able to achieve such benefits from casino operators, we recommended in our original report that they should be able to require regeneration benefits from large and resort (now referred to as regional/leisure destination) casino developments. The Government did not accept this recommendation but instead proposes a

"strategy based upon the direction of regional casinos to the most suitable areas. We believe that this strategy will, through the choice of location of these major developments, achieve the significant economic and regeneration benefits through the development of the casino and ancillary activities, the substantial activity associated with the casino and its knock-on demand for goods and services both at the casino and in the wider local economy".[124]

It is not clear from this what is included in the definition of "regeneration benefits". Mr Weaver, Chief Executive of Blackpool Council, suggested that "there is a need for national guidance and clarity about what is meant by 'regeneration' in order that the regional planning bodies can deliver through the regional spatial strategies the Government's intent".[125] The lack of clarity has led to some confusion between regeneration benefits and planning gain, which are not necessarily the same thing.

92. We are also concerned that the mechanism for achieving regeneration benefits lacks clarity. Regional/leisure destination casinos offer a great opportunity for areas to benefit from regeneration opportunities, outside the positive economic benefit of the development itself. As we have mentioned previously, plans for large scale casino developments are already underway. Alongside this, the process for achieving planning gains is going through a period of change with the introduction of the Planning and Compulsory Purchase Act 2004. The Committee is concerned that the lack of clarity surrounding regeneration benefits could result in potential regeneration benefits being lost. This is a serious risk which needs to be addressed if regeneration benefits are going to be secured. We recommend that the Government reviews its approach to regeneration associated with regional/leisure destination casinos.

The Licensing System

93. In addition to the planning process, the licensing system offers a way of controlling the number of regional/leisure destination casinos. Regional/leisure destination casinos will require a regional casino licence, separate and distinct from the casino operating licence required by existing, small and large casinos. The granting of such a licence is, subject to guidance from the Gambling Commission, the responsibility of local authorities. Given that one of the Gambling Commission's core objectives is the protection of the vulnerable we believe that there may be some scope for guidance on regional/leisure destination casinos to include a reference to the suitability of their location, and the need to avoid them being sited too close to residential areas. The extent to which Gambling Commission guidance could include reference to planning matters is unclear, as planning is outside the remit of the Commission. However, we consider that it might be reasonable to require that, before granting a premises licence for a regional/leisure destination casino, local authorities should confirm to the Gambling Commission that the necessary planning permission has been granted and that there are no substantial planning matters outstanding.

94. This process, in addition to our recommendation that regional/leisure destination casinos are classified as sui generis, would help to avoid the real danger of a local authority, determined to see a regional/leisure destination casino in its area, issuing a regional casino premises licence ahead of securing support from its regional planning body. We therefore recommend that Gambling Commission guidance should include advice to local authorities on identifying appropriate locations for regional/leisure destination casinos and the importance of ensuring that all planning issues are properly concluded before premises licences are granted.

Going forward

95. While we welcome the advances the Government has made in developing the policy relating to the location of regional/leisure destination casinos, outstanding issues remain, not least the apparent conflict between the objectives of the Department for Culture, Media and Sport and the Office of the Deputy Prime Minister. We are keen to see a Bill introduced to Parliament in the Autumn. It is, therefore, of the utmost importance that these issues are resolved as soon as possible. When he gave evidence to the Committee, the Rt Hon Keith Hill MP raised the possibility of creating a Working Group of officials from both departments to address the unresolved issues.[126] The Committee welcomes this idea. As we have discussed earlier, the development of national guidance for Regional Planning Bodies, amongst other issues, could be addressed by a Working Group consisting of representatives of the Department for Culture, Media and Sport, the Office of the Deputy Prime Minister, the Gambling Commission, RPBs and the industry. We therefore recommend that such a Working Group, is established at the earliest possibility with the aim of concluding a planning framework for regional/leisure destination casinos which reflects the policy objectives of protecting the vulnerable and securing regeneration benefits.

83 Department for Culture, Media and Sport (DCMS), Draft Gambling Bill, Government Response to the First Report of the Joint Committee on the Draft Gambling Bill; Session 2003-2004, Cm. 6253, June 2004, page 49 Back

84 Ev 36 Back

85 See Ev 68, Ev 125 and Ev 75 Back

86 Q 370 Back

87 Ev 155 Back

88 Ev 28 Back

89 Ev 70 Back