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When we debated this last week, our concern was about the interaction of CIL, Section 106 and affordable housing. As the noble Lord, Lord Greaves, said, the Minister indicated possible flexibility in future after
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"The Planning Act 2008 provides a wide definition of the infrastructure which can be funded by the levy, including transport, flood defences, schools, hospitals, and other health and social care facilities. This definition allows the levy to be used to fund a very broad range of facilities such as play areas, parks and green spaces, cultural and sports facilities, district heating schemes and police stations and other community safety facilities. This gives local communities flexibility to choose what infrastructure they need to deliver their development plan".
I particularly support the point about potential double charging when a development has already entered into Section 106 obligations, some of which may be very long-term. Like my noble friend Lord Berkeley, we had discussions with Gatwick. However, this is not just an airport or a Gatwick issue.
I am not sure how best to resolve this issue. Part of the solution may relate to how and at what point CIL is charged. I understand that what triggers it is the commencement of development that has been the subject of some form of planning permission. Therefore, in a situation in which Section 106 obligations are already in place from prior development, I do not see how under the rules that could trigger a new CIL charge. However, any new development might, so Section 106 and CIL could still be paid at the same time. The potential for double charging is an issue, and I look forward to the Minister's response on that. However, the thrust of this is exactly right and we support it.
Earl Attlee: My Lords, Amendment 148ZZBBBA, moved by my noble friend Lord Jenkin of Roding, seeks to limit spending on the ongoing costs of providing infrastructure to those items that were originally funded by the levy. New developments may create additional demands on existing infrastructure as well as demands for new infrastructure. The amendment would prevent local authorities from using levy receipts to address the intensification of demand on existing infrastructure, despite the fact that this could be exactly what is needed to support a new development.
My noble friend's Amendment 148ZZC seeks an exemption from the levy for any development that makes a contribution to existing infrastructure through Section 106 planning obligations. This is not appropriate as the two instruments are concerned with different aspects of development. Through the levy, most new development would contribute towards the cost of meeting the cumulative demands that development of an area places on infrastructure. Conversely, planning obligations are concerned only with the site-specific matters necessary to make a particular development acceptable in planning terms.
Local infrastructure may or may not be part of the planning obligation. Where it is any part of a planning obligation, it must satisfy the statutory tests that ensure that they are necessary to make the development acceptable, are directly related to the development and are fairly related in scale and kind. We do not believe that it is appropriate to exempt development that is subject to a planning obligation from making a contribution to the more general infrastructure demands that it places on the area. In addition, the existing legislation already prevents developers being charged twice for the same item of infrastructure through both instruments. That answers the concern of the noble Lord, Lord Berkeley. I will check to make sure that it also answers the concern of the noble Lord, Lord McKenzie. I am not absolutely certain that it does, but I will check, and I am sure we will return to this at a later stage.
Lord Berkeley: The port down the Thames-London Gateway-committed probably £100 million to upgrade the junctions on the roads and the motorway leading to the M25 to cope with additional traffic reported to be coming from its development. I understood the Minister to say that that is exactly what the CIL might be required to do. I see that as double taxation.
My noble friend Lord Jenkin also proposes Amendment 148ZZD, the effect of which would be that where regulations require the charging authority to pass funds to another body, it would retain ultimate control over how those resources are used by confining spending to matters it determines appropriate.
Lord Jenkin of Roding: It is a question not of control but of what the funds can be spent on. That is what I am asking. If it is going to pass the resources to somebody else, it is with the purpose of giving the somebody else the opportunity to spend them. What I have argued is that it must be infrastructure, whether initial or ongoing. Will my noble friend not accept that?
We intend to use the powers of Clause 100 to require charging authorities to allocate a meaningful proportion of any revenue generated from development in an area to the parish or community council for that area. The local council will be free to determine how those funds are used to address the demands that the new development will place on its infrastructure. This amendment seeks to take control away from those local councils and the communities that are being asked to accept the new development and will significantly reduce the incentive effect of these changes.
My noble friend Lord Jenkin asked whether CIL can be passed to others on condition that it is spent on infrastructure. Where CIL is passed to another body,
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Lord Greaves: Will my noble friend confirm that passing those resources to other bodies will occur only in the case of parish and town councils, and community councils in Wales, and that they will not be passed to neighbourhood forums or any other organisations?
My noble friend Lord Jenkin of Roding and the noble Lord, Lord McKenzie, asked whether such resource will be used to meet local government shortfalls. We have clearly set out that the purpose of the levy is, and must continue to be, to support development. I can assure noble Lords that the money cannot be substituted for general local government spending.
My noble friend Lord Jenkin asked the Government to consider greater flexibility in the use of CIL. We will consider whether allowing spending on infrastructure and other matters could improve the levy's ability to support development. We agree that infrastructure is vital to supporting new growth and development but we do not accept that it is necessarily all that is needed. We will reflect on that and return to it at a later stage.
The noble Lord, Lord Berkeley, suggested that strategic developments such as ports et cetera might be prevented from going ahead due to charging under both instruments. CIL applies to new buildings. It does not apply to buildings where people do not normally go, such as power stations, ports, service areas of airports et cetera.
I am grateful for the input of my noble friend Lord Greaves. He asked whether CIL could be spent on playgrounds and bus routes, as the funds from Section 106 agreements can be. The short answer is yes. The Act does not define the term infrastructure exclusively and it is therefore wide as to what could be considered infrastructure. The answer to the noble Lord's recent question is yes.
I have seen today the letter that my noble friend Lord Jenkin referred to. We are considering it carefully. I have no doubt that my noble friend will return to this matter on Report. By that time we will have considered the letter and these matters further, and of course I look forward to further debate. In the mean time, I hope that my noble friend is willing to withdraw his amendments.
Lord Jenkin of Roding: My Lords, I have listened to my noble friend with great care. I shall clearly want to read very carefully what he has said. I realise that we asked him a number of questions for which he perhaps did not have the original briefing. I do not think that what he has said today will provide any comfort to the bodies that have been very concerned about the provisions in the Bill.
The provision in Section 216 of the original 2008 Act uses the word "includes", but this has always been taken to mean, "This is what it is". The purpose of the clause of the Bill is to extend it: that is, the regulation is taken and the powers are there for ongoing expenditure-we have accepted that. However, the question is: can it be extended to something that is not infrastructure? I contend that the original intention of the Act was perfectly clear and that the answer to that has to be no. My noble friend Lord Greaves thinks that it ought to be spent on things like double glazing. I totally disagree. This is not infrastructure in any conceivable sense of the word, and therefore he put forward an amendment to say that it should be used for other forms of development. My noble friend replied to that on Monday by saying that he was going to look at it and reflect on it.
The people who are really concerned with getting on with building infrastructure, and I quoted from the Institute of Civil Engineers, are really very concerned about this, because this is not what was said when the Bill was introduced in 2008. We have to be very careful. We are talking about very large sums of money. I was very grateful for the support of the noble Lord, Lord Berkeley. He made the point that some of these projects are very large. The ICE estimates that the CIL income by 2016 will be around £1 billion a year, so we are not talking about peanuts, we are talking about very large sums indeed. We have to get it right. My noble friends have said that they will consider this and, I hope, be able to meet with some of those who are genuinely concerned before we have to deal with it on Report. What is perfectly clear is that this is not a satisfactory state of affairs at the moment. I will certainly want to return to it, but in the mean time I hope that we can have a meeting to which I can bring along some of the advisers who have been helping me with this, and that we can talk to the departmental officials. It really has to be dealt with so that the position is clear. As I say, we are talking about large sums of investment money. If you are going to have investment, there has to be certainty so that people know where they stand. I beg leave to withdraw the amendment.
Lord Shutt of Greetland: My Lords, it may be helpful if I make the point that it is very much the Government's hope and expectation to publish the forthcoming business early tomorrow. It will set out the programme for next week and, indeed, for the two weeks in September. It has not been possible to be
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Lord Shutt of Greetland: My Lords, I believe that that is exactly what will be in the document on our forthcoming business, but there will be other features too. However, as noble Lords heard earlier, it is the hope and expectation that the Localism Bill will be the major business next Tuesday and, indeed, on Wednesday.
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