Levelling-up and Regeneration Bill

Baroness Pinnock Excerpts

Committee stage
Monday 24th April 2023 Lords Chamber

[Baroness Pinnock (LD)]

My Lords, I thank the noble Baroness, Lady Taylor of Stevenage, and the noble Lord, Lord Best, for raising these important points about buildout.

I will address the noble Baroness’s amendment first. Too many developers choose to land bank having achieved planning permission on a particular site. We know from Local Government Association data that there are more than 1 million housing units with existing planning consent that have not been built. The question we need to ask is: why, when as a country we are desperate for new houses, are we failing to take action to ensure that sites are developed promptly? Is the Minister able to provide any explanation for the long delays in developing sites? Will the Government provide proposals to prevent such delays?

I think we are all keen to have more housing units built, so we should focus on any delays in the system and try to improve buildout. From local experience I am aware of some of the reasons for delay. Where there are several sites with planning consent in the same locality, developers choose to delay construction in order not to have too many units on the market at the same time. That is an understandable commercial decision, but it delays the building of units of housing, which we desperately need. Developers also, understandably, want to create a steady flow of sites to develop as part of their business plans. These extend into several years, so it is not surprising that there is a slow output of new homes. What actions do the Government intend to take to address this issue?

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[The Parliamentary Under-Secretary of State, Department for Levelling Up, Housing & Communities (Baroness Scott of Bybrook) (Con)]

My Lords, Amendment 261 tabled by the noble Baroness, Lady Taylor of Stevenage, proposes two fundamental changes to Clause 104, which modernises the procedure for serving completion notices in England. While I appreciate the intention, I remind your Lordships that completion notices—when served by a local authority or the Secretary of State—must provide the recipient with an opportunity to complete development. It is a “use it or lose it” power. Removing this opportunity for the developer to use the permission, as this amendment does, raises the prospect that compensation from the loss of the permission will be necessary as it is a revocation of a planning permission. I believe this would make completion notices less appealing to local planning authorities.

The second proposed effect of the amendment relates to the removal of finished parts of a development where a site could not be completed in full. Local planning authorities already have the power to require the removal of unfinished developments by order under Section 102 of the Town and Country Planning Act 1990.

The noble Baroness, Lady Pinnock, brought up one or two important issues. In the clauses already in the LURB, we have introduced two further provisions to ensure a better buildout rate of planning permissions in this country. First, the Government will require housing developers to report annually to local authorities on their actual delivery of housing. This will enable them to identify where sites in their area are coming forward too slowly. It will also help to inform whether to sanction a developer for failure to build out their schemes promptly. Secondly, the Government have introduced a new power that will allow local planning authorities to decline to determine planning applications made by developers that failed to build out at a reasonable rate earlier permissions on any land in the authority’s area.

To strengthen the package further, we will publish data on developers of sites over a certain size in cases where they fail to build out according to their commitments. Developers will be required to explain how they propose to increase the diversity of housing tenures to maximise development schemes’ absorption rate, which is the rate at which homes are sold or occupied. The NPPF will highlight that delivery can be a material consideration in planning applications. This could mean that applications with trajectories that propose a slow delivery rate may be refused in certain circumstances. We will also consult on proposals to introduce a financial penalty against developers that are developing out too slowly.

I disagree with the noble Baroness, Lady Pinnock, on houses that are not what a particular local authority wants. I believe that is up to the local authority. If the local authority has a local plan saying that it needs specific types of housing in the area, it needs to make sure that the planning applications that go through will have that in them. Local authorities know their area best, so it is up to them to make sure that their local plan is up to date and reflects what is required.

[Baroness Pinnock (LD)]

I thank the Minister for the information she has provided about sanctions and so on. I wait to see how firm those sanctions are. On the issue of local planning authorities having the power, basically, to dictate to a commercial enterprise what is developed on a site that the commercial enterprise owns, I would love to hear what powers the LPA will have in that regard.

[Baroness Scott of Bybrook (Con)]

The whole system is designed, after the LUR Bill, to be plan led. Therefore, planning applications should be in accordance with, first, national policies and, as importantly, local policies. If local policies say that you need, for example, houses for older people or disabled people, one should be agreeing only those planning applications that have those types of tenure within the developments that are coming forward through planning. If the system is plan led, I would have thought that the inspector should stick to the locally produced plan. On that basis, I hope this reassures the noble Baroness opposite that Amendment 261 is not necessary.

Amendment 269, tabled by the noble Lord, Lord Best, seeks to ensure that the development of large housing sites—defined as sites of 500 or more dwellings or more than five hectares in size where the predominant use will be housing, or designated as a large housing site within a development plan—is diversified in such a way that it provides a mix of new housing that reflects local needs, including social housing, in line with a local authority’s local plan requirements and national development management policies. While we agree with the sentiment of this amendment, we believe that there are better ways of achieving its objectives. The Government are of the view that diversification is best achieved by making this a stronger material planning consideration in the assessment of any housing application, and by requiring a buildout and diversification statement in all prescribed applications. We believe that this is best achieved via a new national development management policy, as that can be applied more flexibly compared to legislation and therefore address the different planning circumstances and housing needs that occur across the country, and that such a measure should not necessarily be limited to larger housing sites.

That is why the Government announced in December 2022—as part of the consultation Levelling-up and Regeneration Bill: Reforms to National Planning Policy—that developers will be required to explain how they propose to increase the diversity of housing tenures to maximise a development scheme’s absorption rate, which is the rate at which homes are sold or occupied. We invited views on the design of this policy, which will help to inform our thinking as part of our fuller review of national planning policy later this year. In these circumstances, while I very much agree with the objective of this amendment, there is a better way to achieve it via national planning policy, and I believe that it should be applied to a greater range of housing sites. This will ensure faster buildout rates and the diversification of those housing sites.

Government Amendment 261A will amend Clause 105 to strengthen the existing powers and hold developers more to account for unreasonably slow delivery or non-implementation of planning permissions. Currently, Clause 105 gives local planning authorities the power to decline to determine planning applications made by a person connected to an earlier planning permission on that same land which was not begun or has been carried out at an unreasonably slow rate. This amendment will enable authorities to exercise the power where an applicant is connected to an earlier permission on any land in their area which has not begun or has been built out unreasonably slowly. This change will send the message to developers that local planning authorities, as well as the communities they serve, expect new residential developments to come forward at a reasonable rate before new planning permissions are considered. This amendment will give greater powers to local areas to tackle cases of slow buildout.

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[Baroness Parminter (LD)]

My Lords, in the absence of the noble Baroness, Lady Young of Old Scone, who cannot be here this week, I will introduce her Amendment 283, to which I and the noble Baroness, Lady Hayman of Ullock, have added our names. As it is her amendment, I will not do what I normally do and speak off the cuff. I have some notes from her, and I will, unusually, read from them.

A number of statutory consultees receive requests to provide expert information and opinion on planning applications and other planning cases. Indeed, the noble Lord, Lord Young of Cookham, just mentioned some of them. The main statutory consultees include Natural England, the Environment Agency, the Health and Safety Executive, Historic England and Highways England.

The volume of planning application requests has increased by 38% over the six years up to the financial year 2021-22. It is estimated that this trend will continue. Natural England alone received almost 18,000 requests in the last financial year. In 2019 the main statutory consultees estimated the total cost of providing this advice at approximately £50 million. Obviously, costs will rise with volume.

Amendment 283 inserts a provision into the Town and Country Planning Act. It would allow the Secretary of State to make regulations to allow statutory consultees to charge developers and others for the provision of such advice and information about planning applications and other planning cases put forward by developers and others to local planning authorities. This provision would bring the cost-recovery arrangements for the majority of planning applications under the Town and Country Planning Act, in line with the proposals in Clause 118, which will allow cost recovery in the case of nationally significant infrastructure projects.

Amendment 283 lays out what particular provisions the regulations may make, including who should pay, how much and when. It also defines an “excluded person” who cannot be charged, unless that person is the applicant for the planning permission. Broadly speaking, in at least the first instance, it seems that the charges would be for the planning applicant or developer to pay, and charges would not be levied on the planning authority. It is all very straightforward and essential if our hard-pressed statutory consultees are to provide a prompt and efficient service to both planning authorities and applicants in the face of the growing case load.

The Minister has ostensibly agreed, as the Government have laid what seems like a similar amendment, Amendment 285C. However, proposed new subsection (3)(b) in the government amendment could be interpreted as prohibiting a statutory consultee charging fees to a planning applicant in respect of the provision of advice to a local planning authority by any route. It could even prohibit current scenarios where a developer is willing to meet those costs under a voluntary agreement, for example under a planning performance agreement or a service level agreement. If that is not the intention in proposed new subsection (3)(b) in the government amendment, the ambiguity needs to be removed.

It would be good to have confirmation today from the Minister that the Government intend to ensure that the statutory consultees can recover their costs. I ask the Minister whether she might be prepared to meet the noble Baroness, Lady Young, and other interested Peers between now and Report to identify a mutually satisfactory and unambiguous version of these two amendments.

[Baroness Pinnock (LD)]

My Lords, I speak to my Amendment 287, which would achieve a planning fee system that would cover costs for local planning authorities. It largely mirrors Amendment 267 in the names of the noble Lord, Lord Young of Cookham, and my noble friend Lady Thornhill. I concur entirely with his arguments, but have some additional points to make in support of the plea to enable local planning authorities to set their own fees.

Too often planning applications, especially those that are complex, such as a major commercial development, have a set fee that nowhere near covers the costs, simply because there is so much more to planning applications than simply considering the plan details submitted at the first stage. I give an example of a recent application near me for a very large commercial development of 1 million square feet—probably a bit more than that—with a fee of £300,000. That is, and sounds, a considerable sum. However, in the end there were more than 200 different elements of the planning application to consider, 96 of which were amendments to the original plan. One of those, which I endeavoured to read, was of itself more than 100 pages long.

Understandably, these applications are hugely complex and require considerable expertise within the local planning authority to understand and respond to them. They are not just about the design and features of the building itself—there is also highway access, road safety, landscaping, biodiversity, trees, noise and light pollution, and the impact on the landscape. In my local authority, they have to consider drainage and, in this instance, 14 attenuation tanks had to be built in the end to deal with run-off from the development. Hugely complex issues are being considered, and it all has to be done within that set fee, regardless. It took nigh on two years for that application to be fully considered and ready for a planning committee. Clearly, the fee failed to cover the costs of the details of the application.

There are implications to all this. The Royal Town Planning Institute reckons that there were 42% cuts in planning budgets over the 10-year period from 2008. There have been increases since, not all of which have been directed towards day-to-day planning officers. Digitisation was one of the issues rightly being considered by the Government. As the noble Lord, Lord Young, has said, the information is that local council tax payers are subsidising planning applications. If I told local people where I am that that was the case, they would rightly be very concerned, when other vital services have insufficient funding.

The RTPI research showed that one in 10 planning officer roles was unfilled. The reason for that is that so many expert planning officers find life much better rewarded—in many ways, not just financially—in private practice. The draining of local planning officers from the system is putting immense pressure on dealing with planning applications, and the timeliness of those, which again is hindering the Government’s aim to build more housing. None of this is helpful to achieving that.

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[Baroness Pinnock (LD)]

My Lords, the Grenfell fire tragedy of June 2017 has rightly ensured that many of us in this Chamber have put our minds to the outrageous way in which the construction industry failed to meet existing building safety regulations and how material manufacturers knowingly sold flammable cladding materials to be put on high-rise blocks of flats. That is not me saying that; the inquiry into the Grenfell fire said that.

We have over the past six years in this House tried two ways, so far, to address those issues, first through the Fire Safety Act and then through the longer, more detailed Building Safety Act. Right from the outset, I and others have said quite clearly that, whatever happens in putting right the wrongs of 20 years or more, the leaseholders are the innocent victims in this situation. They have done everything right in their lives and nothing wrong, and they should not be asked to pay a penny piece towards putting right the wrongs that have been done to them, which were concealed from them when they entered into a contract for their property.

We have, with the Government, tried hard to put this right. We have heard from the noble Earl, Lord Lytton, and the noble Lord, Lord Young of Cookham, who have been on this route march, as it seems, from the beginning, trying to find the answer to the question, “As the leaseholder must not pay, who must?” The noble Lord, Lord Young of Cookham, asked the right question—of course, he always does—which is, “Has the Government done enough?” Some of us, including him at the time, said we did not think so, and so it is proving.

Not only we in this Chamber but thousands of leaseholders are saying that the Government have not done enough. Not only is the construct in the Building Safety Act of the waterfall of responsibilities failing to ensure that remediation takes place promptly or at all, but, meanwhile, as we heard from the noble Earl, Lord Lytton, many leaseholders have awful tales to tell about anxiety caused, mental health that has broken down, financial burdens that cannot be met, ensuing bankruptcy and life chances blunted—and no responsibility of theirs.

Why would any of us involved in legislation allow thousands of our fellow country men and women to be put in this position, where they are being seriously adversely affected, in emotional, financial and social ways, and not do anything—or enough—about it? The noble Lord, Lord Young of Cookham, rightly said again that the Building Safety Act, despite our best efforts, excluded certain groups of leaseholders: those living in blocks under 11 metres, enfranchised leaseholders and, indeed, some buy-to-let leaseholders. That is clearly not acceptable, because those leaseholders are suffering immensely; the noble Lord, Lord Young of Cookham, gave a vivid example of that.

So the challenge to the Government and to the Minister, which I hope she will take up and respond to, is: what, then, can be done? The Government have tried to put in place a series of funding mechanisms and responsibilities, but that is clearly failing to help thousands upon thousands of leaseholders.

The Minister was unfortunately—or fortunately, for her—was not part of the long discussions on what became the Building Safety Act. We were promised at the time that leaseholders would not be expected to pay, but that is clearly not bearing out in practice. Therefore, I hope the Minister will go back to her department and ask those fundamental questions. The Government’s purpose, as expressed by the Secretary of State Michael Gove, was that it was morally reprehensible for leaseholders to pay. If that is the case, let us put that into practice and find a route through, so that no leaseholder pays anything. They have done nothing wrong and they should not be expected to pay.

In his proposed new schedule to the Bill, the noble Earl, Lord Lytton, has made a very detailed proposal about the polluter pays principle. I concur with the principle that those who cause the damage—the construction companies and the materials manufacturers—must pay. We have to find to find a way for that to work in practice. I am hoping that the Minister will come up with some answers.

Finally, the noble Baroness, Lady Hayman of Ullock, has once again raised the issue of second staircases in high-rise buildings and houses in multiple occupation, which we debated during the progress of what became the Fire Safety Act and also the Building Safety Act. Most of us said that, yes, that was the expert advice from the fire service chiefs and that is what we should do; but, unfortunately, that was not accepted by the Government.

I agree with the noble Baroness’s amendment, but I go back to the key to all this. My view—and that of all who have spoken, through all the outcomes that followed the Grenfell fire tragedy—is that, however the remediation of these buildings, of all heights, is resolved, when it comes to the leaseholders, whether enfranchised or unenfranchised, whatever happens, they must not pay. I look forward to the Minister’s response.

[Baroness Scott of Bybrook (Con)]

My Lords, in his Amendments 274, 318, 320 and 325, the noble Earl, Lord Lytton, returns us to subjects that we debated extensively this time last year in what was then the Building Safety Bill. I say to the noble Earl, with the greatest of respect, that this House and the other place considered his arguments carefully last year and rejected them. I really do not think that this Bill is an appropriate place to try to reopen these issues.

Last year, the Government opposed the noble Earl’s scheme and proposed an alternative, the leaseholder protection package, which was agreed by your Lordships and the other place. As your Lordships will be aware, the leaseholder protections in what is now the Building Safety Act 2022 have been in force since June 2022 and form part of the Government’s response to the need to fix defective buildings, alongside a number of other measures that my right honourable friend the Secretary of State set out recently in a Statement in the other place, which was repeated for your Lordships.

Those protections are complex. I would be very happy to have a meeting with interested Peers to discuss the Government’s actions in detail if that would be helpful. If any noble Lord would like to do that, they can get in touch with me or my office and we would be very happy to set that up. But, as I said, the protections are complex and it is true that it has taken time for the various professionals working in this space to get to grips with them. None the less, there is now progress on getting work done, getting mortgages issued on affected flats and moving the conversation forward with the insurance industry to ensure that remediation can be undertaken and that building insurance premiums, which had been excessively high, reflect this reduction in building risk.

I want to be clear with your Lordships: the leaseholder protections are working. The first remediation contribution order to get money back for leaseholders has been made by the tribunal and is being enforced now. In response to my noble friend Lord Young of Cookham, I can say that there have been a further 12 applications for remediation orders to the First-tier Tribunal and nine for contribution orders; that is up to the end of December—we do not have any further updated figures.

The Government’s recovery strategy unit is litigating against large freeholders, and leaseholders have the peace of mind that the remediation bills they were facing—sometimes for more than the value of their home—are no more. I emphasise to your Lordships that changing the basis on which leaseholders are protected would set back by months the progress of remediation work, which is finally happening at pace, and would create further uncertainty in the market.

In addition to the inevitable delay to remediation that would be caused if the noble Earl’s proposals were adopted, I must emphasise that the objections set out by my noble friend Lord Greenhalgh, when he spoke from this Dispatch Box last year, are still relevant. The building-by-building assessment process that he proposes would be both costly and time-consuming, which would not be in anyone’s interest.

While the noble Earl says that his scheme seeks to avoid litigation, our experience shows that the level of complexity and the sums at stake in this field mean that litigation is inevitable—and will necessarily take place in the High Court, rather than the expert tribunal already dealing with disputes under the leaseholder protections, increasing costs and the time taken to resolve cases. I should also make it clear that the Government’s package of measures in this space goes much further than the leaseholder protections set out in the Building Safety Act.

At this point, I would like to answer a few questions. Both my noble friend Lord Young and the noble Earl, Lord Lytton, brought up the point of “under 11 metres”, which I know has been an issue raised. I think I have said many times at this Dispatch Box that the views of the independent experts are clear: there is no systematic risk in buildings under 11 metres. However, we continue to look at these on a case-by-case basis and provide any help to those leaseholders accordingly. If my noble friend Lord Young of Cookham would like to let me have the letter that was sent to him, I would be happy for the team to look at it.