Earl Attlee
(a) for “providing infrastructure to support” substitute “supporting”, and(b) after “land” insert “in a way that does not make development of the area economically unviable”.(2A) In the Table in section 205(3) (which describes the provisions of the Part) for “Section 216” substitute “Sections 216 to 216B”.
(2B) In section 211(4) (particular provision that may be included in regulations about setting rates, or other criteria, by reference to which the amount of levy chargeable is to be determined) after paragraph (a) insert—
“(aa) to have regard, to the extent and in the manner specified by the regulations, to actual and expected costs of anything other than infrastructure that is concerned with addressing demands that development places on an area (whether by reference to lists prepared by virtue of section 216(5)(a) or otherwise);(ab) to have regard, to the extent and in the manner specified by the regulations, to other actual and expected sources of funding for anything other than infrastructure that is concerned with addressing demands that development places on an area;”.”
Earl Attlee
My Lords, in speaking to Amendment 204GA, I shall also speak to government Amendments 204GB to 204GD, 204HA to 204HB, 204JA to 204JC, and refer to Amendments 204H and 204J.
We set out our commitment to consider whether the existing restrictions on the use of the CIL—community infrastructure levy—receipts are drawn in precisely the right way to best support and enable new development and growth. We have considered this alongside our changes at Clause 103, through which we will place control over a meaningful proportion of levy receipts with the neighbourhoods and communities that accept new development and growth. We are consulting on our proposals to use the powers to require local authorities to pass on a proportion of levy receipts raised from development in an area where there is a parish or community council for that area.
Where no parish or community council exists, we will use existing guidance to require local authorities to apply an equivalent amount to addressing the demands of hosting new development in the area and to engage with the community in determining how that proportion of the funds will be spent.
Amendments 204HB and 204JC extend the permitted uses of this proportion of the funds to allow it to be used to support development by providing infrastructure or addressing any other demands that development places on the area. First, any body to which funds are passed under new Section 216A will benefit from these wider spending powers. Secondly, where a charging authority does not have to pass funds under Section 216A, we will have the power to specify that they can use a proportion of the CIL funds in this way. It is our intention to specify the same proportion for this purpose as we will for Section 216A, providing a consistent approach in both parished and unparished areas. The remainder of the funds will be retained by the local authority and must be used to support development of the wider area by funding the provision, improvement, replacement, operation or maintenance of infrastructure.
Our amendments will allow receipts raised from new development to be applied to the range of costs that it creates. They strike the right balance between enabling funds to be directed to the localised demands that development places on the areas that host it and the cumulative burdens that development creates across the local authority and wider area. The levy is to support new development. While the provision of infrastructure is essential to physically unlock new development, it is not the only matter that needs to be addressed to make development acceptable and sustainable to the communities that are asked to host it.
At the neighbourhood level, the impacts of development are more localised, direct and diverse. The impacts will, for the most part, be concerned with local infrastructure, but communities often identify other unfunded pressures on local services as the reason why new development is not acceptable. If communities are to accept and welcome growth, they must be satisfied that they will not suffer as a result of doing so. By placing a meaningful proportion of the contribution that new development makes under the control of the community that hosts it, and by giving that community the flexibility to spend those funds on the matters that it identifies need to be addressed, we will ensure that communities share in the benefits of growth rather than suffer as a result of it. When residents see and understand that development is making a fair contribution towards meeting the demands that it places on their communities, they will be more likely to accept and, indeed, welcome it.
Our amendments will enable the levy to support new development more effectively. The levy will mean that more development can go ahead by providing a valuable contribution towards delivering the infrastructure needed to unlock and enable it, and by ensuring that communities have reasons to say yes to growth. In making our changes we have taken the opportunity to make economic viability an explicit component of the purpose of the instrument. This will mean that local authorities must ensure that charges are reasonable and do not prejudice the delivery of their local plans, including matters such as affordable housing.
My noble friend Lord Jenkin has tabled Amendments 204H and 204J, which are concerned with restricting spending of the levy to matters publicly identified by the local authority that charges it. It may be helpful to the House if I use his amendments as a peg to provide further reassurance. I fully understand my noble friend’s concern to ensure that use of the levy should be transparent; indeed, it must be if developers and communities are to see and understand how the contributions are being used to support development and manage its impacts. That is why we are strengthening, through the levy and the town and country planning regulations, the requirement for local authorities to report openly and regularly on levy income and expenditure.
Our experience from the front runners scheme, which is supporting more than 33 local authorities to implement the levy, is that local authorities are in any case choosing to publish a list of their spending intentions. This demonstrates that a flexible approach to infrastructure lists is working and that a more prescriptive approach is not needed at this time. The legislation already allows for regulations to require them to do so, should we wish to in the future.
I appreciate my noble friend’s concerns, but I hope that he will be reassured by the steps that we are taking to improve transparency and accountability of levy income and expenditure, agrees that our changes are the right means to achieve that, and will be willing not to pursue his amendments. I beg to move.
Earl Attlee
My Lords, I thank all noble Lords who have contributed to this short debate. Responding first to my noble friend Lord Jenkin, yes, we have moved a long way with the community infrastructure levy. My noble friend talked about Section 205 and the restrictions on the application of CIL. He is accurate in terms of history but he will recognise the need to develop good policies as time goes on. He kindly organised a meeting between me, him and the Institution of Civil Engineers, which I found useful.
My noble friend referred to local needs and to changing attitudes. We need to change attitudes because, quite often, the knee-jerk reaction can often be “no”, and that is not helpful for development. Local authorities are best placed to determine the infrastructure need in terms of logistics and so on, but local communities are best placed to determine their much more local needs.
My noble friend asked what a meaningful proportion of CIL is. We are consulting on the matter and have invited views on the question. We have not taken a view on this and will carefully consider the representations made during the consultation period before determining the proportion of funds that should be directed to neighbourhoods that host new development. However, we are clear that the level must be sufficient to give neighbourhoods a meaningful contribution to meeting the impacts of development in their area. This needs to be balanced with the central purpose of the levy, which is to ensure that some or all of the costs of supporting new development are met by the developers.
My noble friend also asked whether there was any limit on how a meaningful proportion must be used. Our changes allow for a proportion of CIL receipts to support development of parish and neighbourhood areas by providing either infrastructure or anything else that is concerned with meeting the demands that the development places on the area. However, the spending must support development of the area. It may not be used to fill gaps in local authority resources. I am happy to give that reassurance.
We are making this change because new development creates local demands that are concerned with matters other than infrastructure. For instance, the provision of new dwellings will increase the population of an area and new or extended office premises will increase the number of people working in an area. Increased numbers of residents or people coming into an area to work will create demands on services in the area, including transport, training, education, health, social and other services, community assets and utilities.
My noble friend Lord Shipley asked about cross-boundary needs in urban areas. It is a good question but I shall have to write to him before Third Reading.
The noble Lord, Lord McKenzie, asked about affordable housing. When setting a CIL charge a local authority must have regard to the viability of development in its area. In considering this viability, the local authority must take into account requirements normally provided for through Section 106—for instance, affordable housing—that will arise from the development. My noble friend will recall that we have tightened up on the use of Section 106.
The statutory framework for CIL provides for protection for affordable housing. This was, no doubt, in the minds of the previous Administration when they implemented the levy. However, we acknowledge that the guidance does not set this out as clearly and robustly as it could. We will revisit the guidance to make it clear that the imposition of a levy must not harm the delivery of affordable housing or other local policies set out in the local plan. I have asked my officials to work with the National Housing Federation to develop appropriate changes and we will reflect on the outcome in updated guidance from the Secretary of State. We are consulting on whether to allow CIL receipts to be used to fund affordable housing. We have asked for views on whether this approach could support local delivery of affordable housing by improving outcomes and offering better value for money. We will determine whether to make the change once we have received and considered the responses.
Inspiration has arrived to answer the question of my noble friend Lord Shipley, who asked to what extent authorities should be required to co-operate in using CIL receipts. This legislation allows authorities to pool resources to deliver infrastructure that supports their areas. We have the power to make statutory guidance about the duty to co-operate, and this could cover matters such as CIL.
The noble Lord, Lord McKenzie of Luton, asked about how CIL money could be used to perhaps bribe communities—
Lord McKenzie of Luton
I do not believe I said that. I was referring to how it was not described by the noble Lord, Lord Jenkin, to touch upon the fact that if these are inducements for communities to accept development, we need to reflect on the issues we are going to discuss in relation to Clause 130. I was not arguing in favour of bribing communities.
Earl Attlee
My Lords, I am struggling to read my inspiration here. However, I intend to make a substantive speech in our debate on Clause 130, which I think the House will find very helpful.
Earl Attlee
My Lords, I will consider any input that is brought to me or other Ministers.
Earl Attlee
“(za) in subsection (1) (levy to be used to fund infrastructure, or pay compensation under section 219)—(i) for “section” substitute “sections 216A(1), 216B(2) and”, and(ii) for “funding infrastructure” substitute “supporting development by funding the provision, improvement, replacement, operation or maintenance of infrastructure”,(zb) in subsection (2) (meaning of “infrastructure” in subsection (1)) for “subsection (1)” substitute “this section (except subsection (3)) and sections 216A(2) and 216B(2)”,(zc) in subsection (4)(a) (power to specify facilities that are to be, or not to be, funded) for “that are to be, or not to” substitute “whose provision, improvement or replacement may or is to be, or may not”,”
Earl Attlee
(c) in subsection (6)(c) (regulations may permit funding of administrative expenses in connection with infrastructure) after “infrastructure” insert “or anything within section 216A(2)(b) or 216B(2)(b)”, and(d) in subsection (6)(e) (regulations may make provision for the use of funding where the projects to be funded no longer require funding)—(i) for “the projects” substitute “anything”, and(ii) for “require” substitute “requires”.”
Earl Attlee
(a) the provision, improvement, replacement, operation or maintenance of infrastructure, or(b) anything else that is concerned with addressing demands that development places on an area.”
Earl Attlee
Lord Jenkin of Roding
My Lords, the noble Baroness, Lady Gardner of Parkes, was here a moment ago. I am not sure why she is not here, but the rest of us can speak to our amendments when we get to them. I do not think that we can move hers.
Earl Attlee
If it might help the House, the noble Lord, Lord Berkeley, can move Amendment 206 without any difficulty.
Amendment 206