Levelling-up and Regeneration Bill (Third sitting)

(Limited Text - Ministerial Extracts only)

Committee stage & Committee Debate - 3rd sitting
Thursday 23rd June 2022 Public Bill Committees

[The Chair]

We are now 20 minutes into this evidence session. In the interests of time, I will call the Minister. If there is any time left at the end, I will come back to you, Mr Pennycook.

[The Minister for Housing (Stuart Andrew)]

Q My first question is straightforward: what practical changes do you think the Bill will make to the people you represent?

Victoria Hills: I represent 27,000 members. Practically, and on a strategic level, we welcomed the Bill, because we welcome the recognition that, rather than having a planning Bill, planning is integral to levelling up and regeneration. That is why we warmly welcomed the Bill: it has elevated the status of planning from being some regulatory thing over there to being fundamentally essential to delivering levelling up. Indeed, we say it is the lead domino; if you get the planning system right, you have the framework and the foundations to deliver regeneration.

That is our starting point. Within that, we have to have a broader conversation—perhaps not today—about how we ensure that local authorities in particular are resourced for the changes. We look forward to the forthcoming consultation on the fees to help to fund some of the additional work. Practically, it will mean that our members are going to be extremely busy—first, with responding to all the consultations, and secondly, moving forward with implementing the new system. There is an urgent need to address the resourcing, as I have highlighted, because local authorities are somewhat struggling at the moment anyway to deliver business as usual.

Some of this will be a bit business as unusual. We have heard that the CIL is potentially a major change. Changing local plans and updating them will take time and resources. It will be a busy period for the members I represent. That said, although we welcome the recognition that planning is integral to levelling up, we do need to have an open and honest conversation with you about how we now move forward quickly to resource local authorities to enable the changes. I hope that answers the question.

David Jackson: Likewise, given the high profile that has been given to the levelling-up agenda, it is very welcome that planning is so closely associated with such an important part of the Government’s programme. We very much welcome that.

For the people I represent, it is difficult to define exactly what the changes will mean, because they are multifaceted. For people I work directly with, there is a lot to get through and understand about the changes, but we are planning professionals and that is what we direct ourselves towards. That is part of our responsibility. For our clients, there is an expectation of a transition period, and that is a process to be navigated through. We are there to help them through that process. I repeat what I said earlier about the importance of trying to get through that phase as quickly as possible so that we can move on to obtaining the key objectives of building prosperity and creating flourishing communities.

On flourishing communities, in the work that we do as planning professionals we become very much associated with and embedded in communities for the period of a project. It is really important that that process of local engagement and projects being opened to the public scrutiny that leads to improvement—[Inaudible.]

[The Chair]

David, you are looking away from the microphone again and we missed what you said.

David Jackson: Sorry. Public scrutiny is necessary to improve projects and win public trust.

Tony Mulhall: Chartered surveyors provide their services largely at the level of strategic land preparation and development delivery, so they are acutely aware of the increasing risk associated with development projects proceeding. Planning comes with certain risks—in other words, getting a project through the planning system—so it is very important that we have a system that works well in process terms.

From a development point of view, planning is one of the factors. We have huge pressure on costs at the moment. I have here a document that I have just received from the Building Cost Information Service that says that the materials cost index has continued to grow, with annual growth in excess of 20%, and figures say that the cost of complying with the building regulations is around 6%. Those are cumulative risks, and the planning system is just one of those. It is a very important one, and getting it right is very important, but in a development context the danger is that investors will defer making decisions on taking projects forward until they have greater certainty about the regulatory environment they are heading into and that that regulatory environment can be priced, in a sense—what is it going to cost to get through the regulatory environment?

We need to take account of that, and not just in relation to large house builders. They are capitalised very well, but a lot of small and medium-sized enterprises find it extremely difficult to engage with the planning system at a level they can afford. That impacts on borrowing: you cannot engage a lender if you have what I would describe as planning risk associated with your side. These are the realities that our members face in advising their clients.

[Stuart Andrew]

Q Thank you. One of the complaints that I hear quite a lot, not just from my own constituents but from people throughout the country, is that people feel planning is something that happens to them, and we know that public engagement with the planning system is incredibly low. Do you think the measures in the Bill—the neighbourhood planning, the priority statements and the digitisation of the whole system—will help to improve community engagement? Do you think that, in turn, it will help to enlist more support for development within communities?

Victoria Hills: We welcome all those aspects, and particularly the investment in digital transformation and a bit more structure around what that looks like for local authorities so that they can make the investments in digital that are required. We also absolutely welcome neighbourhood planning, and also, potentially, street votes and all that comes with that.

Something equally important that we are strongly advocating for is that virtual planning committees can continue in the way they did during the pandemic. We are seeking an amendment to the Bill for that purpose, because we think it provided an additional aspect to the ways in which communities could be genuinely engaged, particularly for those people who cannot get to committee meetings in the evenings because of their own commitments.

We welcome all the aspects that have been included in the Bill to broaden engagement. Our top two omissions are the one that I started with—involving the community in the national policies—and enabling them to join in via a virtual committee.

Tony Mulhall: This is a really important point. Our experience, and what we get reported back, is that the community does not tend to engage with the plan-making process—people need to get a development on the corner of their street before they become exercised—so it is very important for us to understand what is a meaningful way to get feedback from the community about what it is that they do not like and what is top of their list of what they want.

I am not sure that the plans that we put through have the legitimacy we might expect from real engagement with people, because I think they do not fully understand what the plan is saying. We have seen the kind of developments in neighbourhood planning that were really good but probably did not get to the people who need to participate to improve their local communities. There is an interesting measure in the Bill to facilitate that. I would say that we really need to rethink what meaningful participation in plan making is about, because people are coming away from the production of a plan without much knowledge of what is going to turn up in their neighbourhood.

David Jackson: I agree with that point. What we need is engagement at all levels of the plan-making process, from the SDS—spatial development strategy, the new strategic level of plan making—all the way through. It is down to the profession to go out and do that. That is where the parallel development of the levelling-up agenda, putting planning alongside that as the key delivery mechanism, has some advantages, because it demonstrates exactly the role that planning has in facilitating the benefits that we want to see for those communities. My slight concern is in what I might call the hyper-local, because that allows people to focus just on their immediate areas, but as I say, what we want is a focus across the plan-making portfolio, so that people have that aspiration.

One example of the risk of the hyper-local is footnote 54 in the NPPF, which requires onshore wind turbines to be supported by the local community that is most affected. While onshore wind has overall high levels of public support, a massive drop-off in the delivery of onshore wind has been the result of that particular control. It does not take us away from the need to engage with communities at the local level to win their support, but it does create difficulties—challenges—in that hyper-local environment.

[Stuart Andrew]

Q My final question returns to the community infrastructure levy. We have said that we want to take a test-and-learn approach, trialling it with a number of authorities, so I welcome the fact that you want to engage in that process. Do you agree that planning authorities often spend a considerable amount of time in negotiation on CIL or section 106, and often find the negotiations going downwards in terms of investment for the local community? That further erodes trust in the process in respect of what will be delivered on the ground for communities. Will this legislation help to free up the time of some of the planners to do some of the more important strategic stuff? I will go to David first.

David Jackson: On replacing CIL with the infrastructure levy, the simplification of the infrastructure levy based on value is certainly advantageous. In our experience, we were very engaged in the preparation of CIL on behalf of the Home Builders Federation. We engaged with many local authorities on that basis, and it was indeed a very complex process, looking at viability and trying to project that over a period of time and for a range of development scenarios. That simplification is welcome.

I take a slightly different view on section 106. It goes without saying that where section 106 is engaged, we are dealing in large part with complex, difficult, challenging projects. We have to ensure that local communities have trust in the process and that it will deliver the outcomes they expect to see. Inevitably, there is an element of commercial negotiation, because viability can often be engaged where we have multiple demands on investment in a local community, so it is right that we go through that complex process. I think CIL helps in terms of taking—[Inaudible.] The complexity of section 106 is merely a reflection of the complexity of the projects we are dealing with and the wish on both sides—both the community and the developer—to ensure that the infrastructure that is required to make the project work is actually delivered.

Victoria Hills: We have been very clear that anything that comes in needs to not overcomplicate an already quite complicated system. As proposed, the infrastructure levies will all go through PINS—the Planning Inspectorate —which we think will add more delay and cost to the system. We are advocating for the new infrastructure levies to get directly agreed by local authorities with the Secretary of State or the Department, to take out some of what I think you are alluding to—the horse trading, the negotiation and all the rest of it. Then, there is one discussion between the directly elected authority and the Department, and that gets agreed. You can take months and significant cost out of the whole system by not running it through PINS.

Another important point, which I could not make earlier, is that it is really important to understand how, in simplifying the system, the new infrastructure levy will sit alongside other statutory requirements—not least biodiversity net gain and affordable housing—and how, in simplifying it, it will balance out those quite complex aspects. The requirement for affordable housing has always been the case, but biodiversity net gain was not a thing before.

At the moment, until we see the detail, we are not convinced that it will all be simplified. There are some important complexities to take on board.

[Rachael Maskell (York Central) (Lab/Co-op)]

Q In the light of the Government’s proposals and commitment to building 300,000 homes by 2025 and real revision of the planning process, do the witnesses believe that is deliverable? Do they believe we will see homes that are predominantly assets, investments, second homes and Airbnbs?

Victoria Hills: We have always been very clear that the way to deliver great places and great communities is through a robust local plan and framework where the local authority has the opportunity to set out their priorities, which could include some of the aspects you referred to. The elevation of the importance of the local plan in all this is welcome. The detail, which we do not yet have, is on to what extent local authorities will be able to carry on delivering priorities through policy, and to what extent they will get pulled out into the national framework.

We support the principle of the local plan being elevated. We recognise that it is the only way you can move ahead with delivering on agendas including net zero, affordable housing and well-designed, healthy homes. If you are going to have policies against second homes, that may well be something to prioritise in your local plan, or in national guidance—the detail is yet to be seen on that.

Whether or not it meets the housing numbers is still an area for debate. The Government are on the record saying that is very much the plan in action. We will be advocating for local authorities to be well resourced, without delay to the national framework, to enable them to get on with the business of producing local plans as quickly as possible, in order to provide certainty for local communities and the development sector, so that it can get on and start planning and then building. It really just relates to the earlier theme of resourcing.

However, there also needs to be no further delay. There is an urgent need to deliver more homes, as we know. The housing waiting list continues to rise, and more and more people are still desperate to have a place of their own. The need continues to grow, so it is important that we move forward quickly on any regulatory reform and that we move forward with a resourcing package—which surely must include bringing up the planning fees as well, to help to move those things forward as quickly as possible.

Tony Mulhall: I totally agree with Victoria’s point about the importance of having up-to-date local plans, and the important aspect in the Bill of being able to combine local authorities so that they better match their functional urban region or their socioeconomic hinterland. That is important because we are spending a lot of time and money squeezing the carbon out of our buildings, but there will not be much point in doing that if we have to drive miles to get to our jobs and schools. It is critical that we have a proper planning system linked with the standards of quality construction that will achieve climate change.

On the point as to whether the measures in the Bill will deliver the target of 300,000 houses per annum, the feedback that I get from our members is “No.”

--- Later in debate ---

[The Chair]

We have until 1 o’clock and this time I turn to the Minister first.

[Stuart Andrew]

Q Thank you, Mrs Murray, and I thank the witnesses for their attendance this morning.

In the previous evidence session, we heard that people often describe planning as something that happens to them. Do you think that the measures in the Bill will increase community engagement in all aspects of the planning process, particularly the development of local plans and other individual planning applications? Do you think that some of the measures, such as the introduction of the neighbourhood priority statements, will help to increase the number of neighbourhood planning groups that might be spread in areas that have been difficult to reach so far?

Tony Burton: Generally, we think the Bill is helpful for communities who want to have more of a say on planning issues. There are one or two headlines. The most pre-emptive one is that the Bill confirms the statutory role for neighbourhood planning, given the uncertainty since the publication of a White Paper that said relatively little about it and that brought forward some proposals that would have shut out community input, such as those at the planning application stage.

The specific measures around neighbourhood planning, and I appreciate that your question goes wider than that, are relatively limited. The adjustments to the basic conditions and the broad definition that has been provided, which is helpful, will not have a significant impact on take-up. They will help to clarify some elements of process. And neighbourhood planning will be caught up in the same changes as local plans, when it comes to the primacy of the development plan and the centralisation of the development of management policies. Again, they need to play out, but much of that is welcome, because it attaches additional weight to the document, and to the time and effort that volunteers invest.

The neighbourhood priority statements are triggering some interest among the groups we work with, but they are also raising a significant number of questions. In our view, if the aim is to support greater take-up, particularly in urban areas, which I know the Minister is keen to see, then more needs to be done. They need to be seen as something that is additional to and complementary to neighbourhood planning, not a replacement for it.

The legislation is quite weak in the weight that needs to be attached to it by local authorities; the “have regard” requirement is weak. We have a decade of experience in London of boroughs not really taking that much notice even of neighbourhood plans, which are statutory documents, so we would like to see a stronger weight attached.

It needs to be confirmed in the legislation, not just elsewhere, that it is about more than informing local plans. We understand that that is the Government’s intention, but the current drafting of the Bill is quite restrictive. We think that it would be really sensible if the Government supported communities to pilot and to try to make all priority statements before the legislation is finalised, so that we get a real sense of what they could achieve.

The disappointment is that the local planning provisions are not more extensive, to encourage wider community involvement. We are about to publish our “The State of Neighbourhood Planning in London” report this evening, and it shows that progress in engaging communities is still being hampered by obstructive local authorities in many cases. Therefore, we believe that if the Bill is to effectively engage communities in leading development, as opposed to responding to it—doing planning, as opposed to having it done to them—it really needs to strengthen the legal duty on local authorities to support neighbourhood planning. It needs to give neighbourhood forums the same powers as parish and town councils in receiving and spending the neighbourhood element of the community infrastructure levy. At a stroke, that is the single most important thing that the Government could do to encourage local planning in cities. The Bill also needs to set time limits on local authorities making decisions on key stages.

The final point we would make is that the Bill itself will not be enough, and that there will need to be support for communities to engage and involve themselves. We would put particular attention on the role of the neighbourhood planning support programme, which is probably the single most important measure available to accelerate community involvement in planning decisions. It could be significantly improved and increased.

Jonathan Owen: I am sure it will not surprise any of you to hear that probably the No. 1 issue affecting 10,000 parish and town councils and 100,000 councillors is planning. That is top of their agenda, and I think it would be fair to say that we need to look at every way we can to make sure that the public are more effectively engaged with the system. We are pleased with the emphasis on a plan-based system—that is right—and public engagement in that planning is absolutely vital.

The main area of interest for us is neighbourhood planning, and parish and town councils have really been in the driving seat of producing those plans. I think there have been about 3,000 so far, with about 90% done by parish and town councils. They have had amazing referenda, with something like a million people voting in them over the last few years. I think they cover an area of about 10 million people. That is a really good way in which the public can engage with the planning system, but there are thousands and thousands of other communities that are being left behind and that do not have neighbourhood plans by parish and town councils or neighbourhood forums.

Some of the feedback that we had from our 10,000 parish councils was that they were concerned that it will be costly and time consuming, and that the neighbourhood plans will be overlooked and not taken seriously by principal authorities. A lot of the measures in the Bill will help address those issues, which should help with promoting neighbourhood planning.

This must not stop with the Bill. If you are going to reach the other 7,000 or 8,000 communities, we need to make sure that we are promoting neighbourhood planning and its benefits, and that we are investing in helping those communities to do that work. I would encourage you to continue with the grants that are available, and perhaps to make them easier to access. We have had a good start to neighbourhood planning, and I am really pleased that you are committed to continuing with it and making it more effective. We will work with you to try to make that happen.

There are a couple of bits of other feedback around the infrastructure levy. Again, that is to be supported, but there is a risk that because the percentage is the same regardless of whether you have a neighbourhood plan or not, there might be a slight disincentive to produce a neighbourhood plan. As you know, there is a boost to the share of the community infrastructure levy if you have a neighbourhood plan. It would be good if you could consider how best to address that point, so that people are incentivised to have neighbourhood plans and to engage effectively with the public.

On the specific matter of the mini neighbourhood plan, I think that is fine but, again, we need to make sure that doesn’t limit communities’ ambitions to go further and to have neighbourhood plans. We probably need to balance that territory.

I have been amazed by the innovation of many neighbourhood plans and the things they are now trying to address, including climate change, health and wellbeing, such as dementia-friendly aspects, and a vast range of other things. Clearly, we must not lose that innovation. We must use this Bill to drive forward neighbourhood planning and get more people involved with it, and I think that would be a good thing.

[Stuart Andrew]

Q Thank you. In the spirit of wanting to encourage more people to get involved in the development of local plans, we have certainly heard from communities that it is a very complex process. If you are a parish or town council, there may be some resource you can lean on, but in areas that are not covered by town or parish councils such work is reliant on volunteers. Do you think the digitalisation of the process will life a lot easier? Will that encourage more people to take up the mantle of developing a neighbourhood plan for their community?

Jonathan Owen: I think one thing we have learned over the last couple years is that people are getting more and more used to digital engagement and using such systems, so that probably will be the case. Obviously, you will need to review and monitor it, but I think it is certainly something that is worth developing further.

Many of our parish and town councils are already using digital processes when considering planning applications for principal authorities, so I think that could well make a difference. There might be some capital investment required to ensure that even remote communities in the middle of rural Suffolk, where I live, can access the material online without being excluded.

Tony Burton: Our experience is that digital is part of the answer. In relation to local and neighbourhood plans, we would point to the opportunities it presents around new, complementary forms of community engagement—there are now a variety of tools available to support that—and more effective ways of pooling and analysing the evidence that is required, which is often a minefield of PDFs that do not link to each other or help people to navigate the system or get to the nub of the issues.

There is a potential—this is something we have been pressing for—for the neighbourhood planning support programme to provide bespoke support around this and to offer provision for particular elements, such as centralised tools or databases. Also, we would emphasise more digital mapping. Almost by definition, planning is about maps and places—it is spatial—and yet the ways in which we bring everything together on a map are still rather clunky and not all that effective. The best of what is out there shows what can be done, and the best should be the norm.

I would emphasise that digital is only part of a solution. It is no panacea and nothing is more important than the peer-to-peer, face-to-face support that communities need to support them to be their best when it comes to engaging with these processes.

[The Chair]

I am afraid that this will have to be the last question from the Ministers before I move to the Opposition spokesman. Minister O’Brien, I believe you have a question.

--- Later in debate ---

[The Parliamentary Under-Secretary of State for Levelling Up, Housing and Communities (Neil O'Brien)]

Q Thank you, Mrs Murray. The Bill comes at a time when various processes to look at the reform of neighbourhood governance are still under way, but it still contains a number of important changes, be it the strengthening of neighbourhood plans or the changes to the infrastructure levy, with potentially larger sums for neighbourhood communities. There are also things such as street votes and high street rental auctions, which might give community groups, and indeed parish councils and the like, a chance to get on to the high street and increase their visibility. Reflecting as practitioners of neighbourhood governance, what is your advice on how best we can put into practice the different measures in the Bill so that they best channel the energies and pick up the concerns of neighbourhoods and local communities?

Jonathan Owen: We are really keen to see the detail on some of the other aspects of the neighbourhood governance review. The White Paper held out for us real promise to ensure that the opportunities of devolution and levelling up were really seized, so I hope you will not mind if start off by encouraging you to consider how you can build aspects of that wider review into the Bill. We are particularly keen to see the review conducted within quite a reasonable timescale, to be involved in the process and to make sure that any proposals that come out of it are enacted. We would quite like to see some sort of placeholder clause put in for street votes, to say that the neighbourhood governance review will be completed within a certain time and the agreed proposals enacted. I do not know whether that is possible, but I really do think you might miss an opportunity if you do not engage fully in that review and implement some of its actions.

The key things for us are about making it easier to set up parish and town councils. At the moment, about two thirds of the country has a parish, but only about a third of the population, which means that two thirds of the population are missing out on having the first tier of local government supporting community empowerment and helping them address the big challenges that we face. Many of you will be aware of the research done by Onward. Its social fabric index showed that places with parish councils tended to have a stronger community identity and so forth. I think there are some real opportunities that need to be picked up either as part of the Bill or as part of that wider neighbourhood governance review.

The other big area for us is funding of the sector. At the moment, our councils are not necessarily able to access some funding streams, such as the community ownership fund and other things. It would be good to look at making it possible for them to access that funding. An interesting example of that was how, through the covid pandemic, a lot of our 10,000 councils stepped up really early, as you will be aware, to set up volunteering arrangements and support local communities. Many of them did really great things, but many of them lost out from lost income. You were able to compensate the principal authorities but unable to compensate parish councils that had lost out. To be honest, principal authorities were reluctant to devolve much of the funding they received down to our level.

I think you should consider using the Bill to put in place a mechanism whereby you would be able to fund local councils directly. That could be really helpful to this Government and probably to future Governments when another big problem happens, such as the pandemic, so that you would be able to reach down to communities throughout the country and provide some financial support or lifeline as necessary.

On the street votes, we will be interested to see the detail on that and, again, picking up on my other point on neighbourhood planning, we just need to make sure that that complements and does not replace the wider neighbourhood planning role.

Finally, returning to the last question on digitalisation, the holding of remote meetings has been really useful in the last couple of years. We have seen evidence that lots of members of the public have attended parish and town council meetings because they are able just to attend for the one item that interests them, which is often a planning matter. Enabling councils to meet remotely and have engagement remotely from residents would be really good.

Tony Burton: I think it is a really helpful question to be asking at this stage. There is experience from similar questions that came through on the Localism Act 2011, from which some of the existing community rights measures stemmed. If we look back over those 10 years, we see that some have been successful and some have disappeared, frankly—they might be on the statute book but no one is using the power they provide. The things that worked are those that responded to what people want—there may be lessons here for the provisions you cited and others in the Bill. They were a response to what our communities were asking for, as opposed to us saying, “We’ve got a good idea. Please will you use it.” Some came with support and help, which allowed communities to really understand how to navigate and use the process and talk to others that are maybe slightly further ahead of them in the process. Some in a sense held the ring on some of the bigger questions.

That is why neighbourhood planning is so good. It is such a flexible and strategic tool, as well as being locally specific. You can make it a single policy about a single issue if you want, or you can make it a mini local plan that covers the bases. It is up to the community to drive that process.

I would also encourage you to anticipate where there will be blockages in the application of whatever powers or rights are being established. With neighbourhood planning we have had to retrofit a lot of those, and it has not been that helpful. There have been things such as the timetables for local authorities to make decisions and some of the powers to appeal to the Secretary of State. It is actually worth stress testing these against the worst cases within which they are trying to be applied as well as thinking that we are always going to be operating in a benevolent environment.

[Neil O'Brien]

Thank you. That was very helpful.

[The Chair]

I call the shadow Minister.