My Lords, that is what this Government are working towards in terms of fair funding across the country and ensuring growth in those regions that have not previously had as much growth as we would wish.
My Lords, the Minister talks about empowering northern cities in particular and devolving responsibilities, but is it not the case that the Government have consistently hit areas such as Liverpool and Manchester, some of the most deprived parts of the country, with the largest cuts in funding? What is empowering about taking with one hand and giving back far less with the other?
My Lords, after talking to local government leaders in both Liverpool and Manchester I know they are very pleased with what this Government have given them. If we just look back over the last 30 years we see that it was a Conservative Minister in the form of the then Michael Heseltine who did so much work in Liverpool. It was a Conservative Minister in the form of the then Michael Heseltine who led the regeneration of Hulme, who brought the Metrolink to Manchester and, indeed, who started the regeneration of Manchester after the bomb. I do not accept the noble Lord’s point.
My Lords, my noble friend has a point about social capital, which has been in decline since the war, but this Government have been successful in many of their efforts to encourage people to engage in community life and indeed to combat the loneliness that afflicts so many people, particularly our elderly.
On planning and engaging with local government, communities are now far more involved in the destiny of neighbourhood planning. One hundred and thirty thousand young people are delivering community projects through the National Citizen Service, and this has resulted in 3 million volunteering hours. The Centre for Social Action has invested £40 million and has leveraged £27 million into 215 social action projects.
My Lords, I should like to ask about neighbourhood planning, but before I do that perhaps I may take the opportunity, on behalf of the Labour group, to pay tribute to the noble Lord, Lord Phillips of Sudbury, for his substantial input into our deliberations over a number of years. We wish him a long and happy retirement, doubtless in the company of some of his friends from the other end.
The noble Baroness referred to the new neighbourhood planning regime brought in by the Localism Act 2011. As regards the coverage of those neighbourhood plans, it is understood that three-quarters of them are concentrated in the south of England and only a third in urban areas. Little has been done to widen the remit of the plans and to encourage uptake in disadvantaged communities. What more do the Government propose to do to help disadvantaged communities to have their opportunities in this regard?
My Lords, 1,400 communities have been involved in neighbourhood planning, but I am afraid that I will have to get back to the noble Lord on where those communities lie. There is no doubt that for community cohesion, when neighbourhoods are involved in their own destiny, for example in planning, it leads to happier communities.
(9 years, 6 months ago)
Lords ChamberMy Lords, as regards the use of CCTV generally in parking enforcement, it is clear that the operational guidance on parking issued by the previous Government in 2004—that is, that CCTV should be used only where parking warden enforcement is impractical—has been largely ignored. It is now used on an industrial scale. For people such as my noble friend Lady Oppenheim-Barnes to be issued with a penalty charge way after the event is simply unfair. Independent parking adjudicators have also agreed that it is unfair. Such practices also undermine the revitalisation of high streets and shops and cross the line of public acceptability. If parking is too expensive or prohibitive, shoppers will drive to out-of-town supermarkets or simply shop online, leading to ghost-town high streets.
The point was raised about exempting the zig-zag lines on a pedestrian crossing as opposed to those outside a school. High streets, where pedestrian crossings are generally situated, are well patrolled by both police and enforcement officers. In any event, parking on a zig-zag line is not just a breach of parking regulations but incurs three points on your licence. That is why, in terms of differentiating between schools and high streets, the safety issue outside schools led the Government to think that the latter case was a suitable exception.
The first amendment in this group concerns the serving of parking tickets. There may be occasions where it is impossible for a civil enforcement officer to physically stick a ticket on to a vehicle or serve a notice at the scene of the incident. The Government are aware of this and have made provision in draft regulations to ensure that service by post is possible in such circumstances. On that basis, I hope that the noble Lord is content to withdraw that amendment.
Noble Lords are also seeking to increase the number of areas where local authorities can continue to use CCTV to enable the issuing of tickets by post. I have given a couple of examples of where the Government have made exemptions, or indeed where they have not. I think that noble Lords and all interested parties will have their own views on where CCTV should or should not be used. The Government accept that sole reliance on CCTV evidence to enforce on-street parking regulations is suitable in certain circumstances. However, if we accepted every argument for increasing the exemptions, we would be back where we started. We have given careful consideration to the list of exemptions and based our decisions on the views of those who responded to the consultation, one being on the issue of the safety of children outside schools.
The noble Lord also offers a new definition of the term “around schools”. This definition would be neither appropriate nor practical. The 100 metres specified in the amendment, or any specified distance, would be arbitrary. Within that distance, it is likely that roads will bend or side roads will branch off the school road. It is unclear how this will be dealt with. Any definition needs to be practical as well as reflect policy concerns.
Amendment 56 would make these powers subject to impact assessments before they were brought into force, which is both unnecessary and undesirable. The Government are proud of the stance they have taken to reduce the impact of rules and regulations on businesses and policymakers. Government guidance published in 2013 clearly states that impact assessments are required only for measures that regulate or deregulate business or concern the regulation of business. This clause applies only to local authorities that carry out parking enforcement, and no impact assessments are therefore required.
This whole issue is a matter of principle for the Government, not of balancing impacts. Drivers often receive a parking ticket through the post several weeks after the alleged contravention. They are given no opportunity to examine the parking location at the time the incident is alleged to have taken place, thereby making it difficult to challenge the alleged contravention. That is fundamentally unfair, and the Government strongly believe it should be remedied. I urge noble Lords to withdraw or not move their amendments.
My Lords, I thank the Minister for that reply and thank other noble Lords who have participated in this debate. Given the hour, I shall not prolong the matter, except to say that I am still unclear as to which of proposed paragraphs (a) to (g) in Amendment 54 the Government support and which they do not. I acknowledge that my description regarding the inclusion of CCTV around schools perhaps needs to be refined, but the principle holds.
The impact assessment was not the issue. It was that parking enforcement may be a responsibility of local authorities but in many instances it is contracted to the private sector—hence the list that the noble Lord, Lord Tope, referred to. I thought that the Minister said that the issue of whether there should be an equalities impact assessment was a matter of principle for the Government. I am not sure that I heard her correctly, but it would be a rather strange explanation if she did so. I remain unclear as to why an equalities impact assessment is not to be forthcoming. However, given the hour, perhaps we should read the record and follow up in correspondence. I beg leave to withdraw the amendment.
My Lords, we must all be aware of the dangers and inconvenience of parking on pavements and the risk that this can pose for pedestrians. These risks can be especially acute for those with a sight impairment or those who have a mobility difficulty and rely on using wheelchairs or buggies. The problems are compounded, too, for those who have responsibility for children and who try to navigate the pavements with prams. The consequence is that all too often pedestrians are forced to navigate busy and dangerous roads instead. For some, of course, pavement parking can restrict their right of way completely. As the noble Lord, Lord Low, said, we need to be mindful that pavements are not generally constructed to carry the weight of heavy vehicles and pavement parking can cause the break-up of the surface, adding further hazards, even when the offending vehicles are not present. This amendment seeks to address those concerns outside London by making it an offence to park wholly or partly on a verge, footway or any other part of an urban road. But this blanket ban can be overridden by resolution of the highway authority or by the Secretary of State.
We acknowledge the weight of opinion and the power of the argument which supports this approach. We share the need to address inconsiderate and dangerous parking and to seek to restore to pedestrians their right to proceed unimpeded. But at the same time, we have to recognise that there are some streets where some pavement parking may be inevitable—to maintain the free flow of traffic, to allow loading and unloading, or to allow for vulnerable passengers to be disembarked. Moreover, the premise of the amendment is that all people who park their car on the pavement are doing the wrong thing and should be made guilty of a civil offence. We do not accept that.
If we are to redress the balance and tackle the problem of inconsiderate pavement parking, how is this best achieved? We need to work through how it can be delivered in practice. We are keen to empower councils to tackle problem parking. If there are any barriers or bureaucracy preventing this we would be keen to look at ways we can change the legislation so that that is not the case. We do not think that the blanket ban is the best way to go. We consider that individual authorities, which know their areas best, are better able to determine the extent and timing of any ban. For some, an initial blanket ban may be the immediate answer, but others may want something more selective which addresses the most urgent problems first. In some cases, there will need to be liaison between authorities so that approaches are co-ordinated. We support the thrust of what the noble Lord is seeking to achieve, but we think there is another approach so, with regret, we are not able to support him today.
My Lords, I thank all noble Lords who have contributed to the debate on the amendment. It demonstrates that there is no perfect system to allow traffic and pedestrians to move around entirely satisfactorily.
I shall start with the points made about London. Pavement parking in London is banned but people still do it. Enforcement of properly targeted local bans outside London would be more effective than a blanket ban that does not reflect local circumstances. On the more general points, local authorities already have the power to introduce footway parking restrictions where they consider it appropriate. They are in the best position to decide on local parking restrictions and need to consider all road users when taking such decisions. A national ban of the type proposed would require local authorities to remove all existing restrictions, then renew their urban areas where footway parking should nevertheless still be permitted, consult the community and erect new signage and markings. There could be a significant burden on local government.
The amendment proposes banning footway parking but would allow authorities to permit it where it is desired by simple resolution. Circumvention of the traffic regulation order—TRO—process would take away important protection for the public. The statutory TRO process requires authorities to undertake consultation and advertise their proposals before councils take final decisions. A noble Lord made the point about the TRO process being expensive and cumbersome. It is not true to say that the process is a barrier. Some local authorities make up to 200 orders a year for a variety of traffic management purposes with an average authority making between 50 and 60 orders per year.
The Department for Transport’s guidance to local authorities makes it clear that during the appraisal of their parking policies an authority should consider whether pavement parking is problematic in any part of that area. If it is, and it is not covered by an existing traffic regulation order, the authority should consider amending the existing order or making a new one. The noble Baroness, Lady Kramer, wrote to all English traffic authorities on 27 June to remind them of their existing wide-ranging powers to prevent people parking on the pavement where it is a problem.
The noble Lord, Lord Low, made a point about damage to pavements. The Government are committed to investing in our local highways, including the footways. We are providing local authorities in England with more than £3 billion over four years from 2011-15 for the roads and footways for which they are responsible. In addition, in June 2014, the Government announced that they were committed to providing just under £6 billion for local highways maintenance over the six-year period from April 2015 to March 2021. This equates to £976 million per year to local authorities for highway maintenance.
In conclusion, the Government have concerns about the burden on local authorities of managing a change of this scale, a point to which the noble Lord, Lord McKenzie, alluded, especially when those authorities have comprehensive powers to ban footway parking. I have undertaken to have a discussion with the noble Lord, Lord Low, before Third Reading but I would at this stage ask him to withdraw his amendment.
My Lords, I should make it clear right from the outset that the measure in this Bill is about on-street parking, which is the preserve of local authorities. The issue of ANPR is totally separate and the Government are not going to regulate companies in a Bill that seeks to deregulate.
The noble Lord’s amendment seeks to introduce a new clause which would ensure that measures in the Traffic Management Act 2004 do not prevent local authorities from using an approved device in their off-street car parks. The amendment would apply to the entire Traffic Management Act. The Traffic Management Act sets out the framework for local traffic authorities to manage all aspects of their parking policies. To disapply the entire Act in relation to car parks would create an impossible situation where the legislation that prescribes how local authorities should operate is undermined by itself.
I think that the noble Lord may in fact be concerned about the specific measures in Clause 39 and is apprehensive that these will be extended to local authority off-street car parks. I can assure him again that the measures in this Bill apply only to on-street parking. The Government are not seeking to extend these provisions to off-street parking and have no plans to do so. It would be unnecessary to set out in primary legislation policy areas that the law should not apply to.
Permitting local authorities to manage their off-street car parks with camera technology is something that I know some organisations are keen to see happen. However, the Government have not set out their position on this. We have brought forward a range of parking measures designed to help local shops, support drivers and give communities a greater say on parking policies. These proposals have been established for 18 months and have been consulted on. At no point have we indicated any intention to legislate on off-street car parks.
To bring into the Bill at this late stage measures on a different aspect of parking policy would not give sufficient opportunity for people to consider their implications or to offer an opinion. We believe that this is something on which we should consult before any changes are made to the law, and I would urge the noble Lord to withdraw his amendment.
(9 years, 7 months ago)
Grand CommitteeI think that it was the fifth firm. I cannot remember whether there were any beyond that, but there may have been changes in the interim.
What requirements, if any, will be placed upon appointed persons in this regard to seek to bring diversity of providers to the market? The regulations cover the obligation of appointing persons to oversee issues of independence. Generally, this should cover the independence of the auditor from the authority being audited as well as the independence of the auditor from the appointing person. As the Minister said, there has been extensive consultation around these proposals, but significant and authoritative concerns still appear to have been raised in some quarters. I refer first to comments made by the Audit Commission, which chime with those made by the noble Lord, Lord Palmer. How does the Minister respond to the comments made by the Audit Commission in its letter to all noble Lords written in September 2014? I refer to two paragraphs in particular. The first says:
“Currently all local authorities have their financial documents subjected to review by an external auditor. This is at no cost to most councils spending less than £25,000 a year and has a maximum cost to them of £100 a year. Under the current government’s proposals, external checks will not happen routinely for local authorities spending less than £25,000 a year. However these bodies will have to appoint an auditor for when local people wish to contact one with formal questions or objections. Additionally, these parishes and other bodies will have to publish specified information on their website or, if they don’t have one, on the website of the district council. This will inevitably cost more than the current arrangements”.
That is precisely the point the noble Lord made. The commission goes on to say:
“The regulations making provision for all procurement possibilities (exempt opted-out authorities, exempt opted-in authorities, non-exempt opted-in authorities, and non-exempt opted-out authorities) are close to impenetrable. Administering these complex new arrangements will also require any collective procurement body to hold and keep up to date large amounts of information about all 10,000 or so small bodies across the country. This will include contact details, whether they want to be part of the body or not, all the audit appointments the body has made, and all the bodies where auditors have used their statutory powers. This will add to its costs and therefore increase audit fees”.
How do the Government respond to that?
Moving on briefly to the position of the Institute of Chartered Accountants in England and Wales, I should declare my interest as a fellow of the institute, although it is a long time since I practised to earn a crust. A key part of the new arrangements will be the NAO’s proposed Code of Audit Practice. The Minister will be aware of the responses to the draft code as well as the smaller authorities regulations, in particular that of the ICAEW. Although broadly supportive of the code, the institute has expressed some reservations about smaller authority assurance arrangements. It expresses these in two paragraphs in particular, and as an aside I should say that it also refers to the issue of value for money in arrangements going forward:
“We have noted the statement in paragraph 3.6”—
of the consultation document—
“‘should evidence of poor value for money become apparent during the course of the audit, the auditor should consider the implications of this for their work.’ It would be helpful to clarify that this does not require auditors to search for evidence of poor value for money, but rather consider the underlying arrangements where a significant situation might arise which identifies that value for money is not being achieved”.
Is that right and are the Government happy that that is the position?
I now move on to small authority assurance engagements, to which the noble Lord, Lord Palmer, also referred. The institute states:
“As you know, ICAEW has had significant concerns about the government’s proposals in relation to smaller authority assurance engagements. In particular, our concerns have centred around the mis- understanding of the difference between ‘audit’ and ‘assurance’ engagements”.
It goes on to say:
“ICAEW would not be supportive of a change to the definition of audit as suggested by DCLG and we would strongly urge the NAO to also reject moves to create such confusion and to create a new definition. Indeed, as indicated in our response to government on the smaller bodies’ regulations … we would not recommend that any ICAEW member firm take this work on if significant changes to the regulations are not made and that the definitions of audit and limited assurance continue to be mis-interpreted”.
That is pretty strong language, and stronger than I have read in any representations that it has made before. The Minister said that the Government are still in discussion about that, but can she say something more about whether there is any movement or convergence of views on that with the institute? If the institute is advising its members not to engage, that is a very serious blow indeed. If these issues with the ICAEW have not been resolved, and the institute maintains its stance on discouraging member firms from taking on assignments, there is a major problem. Obviously, there is a little time before we get to 2017, but it would be good to know that there was some progress on that matter.
I have one or two further minor points for the Minister. An opted-in authority will not be required to have an auditor panel, but if it does, that panel must not be consulted on opted-in matters related to the audit or the auditor appointment. Why is that provision there? It is not apparent to me as it stands. For smaller authorities, the exercise of the public right to question and object must in future take place within the 30-day inspection period rather than in the period after it. What is the purpose of that change?
I have one final point. Under the transparency code for smaller authorities, there has to be an explanation of any differences between balances carried forward and total cash and short-term investments. How is that supposed to help? As it stands, it could be interpreted in myriad different ways. These regulations are exceptionally complex. We would not seek to stand in their way, and guidance will obviously help, but we hope that the complexity will not defer the opportunity to use this approach, which is an important strand of our discussions on the Bill.
I thank all noble Lords who have contributed to this debate. Like them, I declare an interest in local government, but I do not declare an interest as an accountant—although I declare an interest as being married to one.
The noble Lord, Lord McKenzie, is quite correct that this is a complex area. The more we look into it, the more we realise how complex it is. I will go through the various points that noble Lords made.
I wonder whether my noble friend Lord Palmer is the same Lord Palmer who was on Barnet Council.
(9 years, 9 months ago)
Lords ChamberThere is no reason why they should not, my Lords. In fact, the National Trust has supported Defra’s recent pollination strategy, which is so important in protecting insects such as bees, which have been short in number in recent years.
My Lords, I understand that land purchased or appropriated by local authorities to use as allotments must not be sold without ministerial consent. Have any ministerial consents been granted during this Government?
My Lords, the noble Lord is absolutely right, and I understand that consents have been granted. I will provide him with the exact figure, however.
(9 years, 9 months ago)
Grand CommitteeMy Lords, noble Lords will know that business improvement districts provide a mechanism for the local business community to come together and agree to fund improvements to its local trading environment.
Introduced in 2004, business improvement districts have proved to be a popular tool, with more than 180 now in operation across England, many of which are now in their second or third term. However, only the occupiers of property—the business ratepayers—currently can vote in a ballot to establish a business improvement district levy to determine what improvements will be made and agree the funding arrangements. Property owners can contribute but only on a voluntary basis and only after the business improvement district has been established. Not only does this mean that property owners do not get an opportunity to influence the activities or services provided by the business improvement district, but the arrangements are arguably inequitable, because all property owners benefit from the business improvement district’s activities but only some contribute financially
Through these regulations, therefore, we are proposing to give property owners the opportunity to promote their own business improvement districts, where primary legislation allows. I say “where primary legislation allows” because noble Lords should note at this point that property owner business improvement districts can currently exist only where there is a ratepayer business improvement district in operation and where a business rate supplement is being levied. This is because the enabling powers are contained within the Business Rate Supplements Act 2009. As the only business rates supplement currently in operation is in London, to fund the delivery of Crossrail, a property owner business improvement district could be established for the time being only in London. We will, of course, certainly consider rolling out the powers more widely once we have had the chance to review the first schemes.
The case for property owner business improvement districts was recognised during Mary Portas’s 2012 review of the future of the high street. This highlighted the role of property owners in the regeneration of town centres, and she recommended that the Government should legislate to allow landlords to become high-street investors by contributing to their business improvement district. The Government accepted this recommendation and in 2013 consulted on the introduction of property owner business improvement districts. Consultation responses supported the principle of establishing property owner business improvement districts and the detailed approach the Government proposed. That approach was that the rules and procedures for property owner business improvement districts should, as far as possible, mirror that of the successful model adopted for ratepayer business improvement districts. These regulations enshrine that approach.
As with ratepayer business improvement districts, these regulations give a large degree of discretion to the business improvement district proposer. The size and location of a BID, the identification of those liable for the levy—and therefore eligible to vote in the ballot—the amount of levy and the activities or services to provided within the BID are all matters to be determined locally and must be clearly set out in a proposal document. Importantly, it is also for the proposer to set out the type of owner who should be liable for the proposed levy. So, for example, that may be the freeholder or long leaseholder, as the proposer sees fit, taking account of local circumstances. The proposal document should also identify the ballot date, the commencement date, a statement of any existing baseline services in the area and a map and description of the geographical area of the business improvement district. The ballot will be organised and run by the ballot holder, who will be the returning officer for elections for the relevant local authority. The ballot holder will be responsible for issuing the ballot papers and announcing the outcome of the ballot. In doing this, the ballot holder is required to state the total number of votes cast, the aggregate rateable value of each property class identified as being eligible to vote, the total number of votes cast in favour of the question on the ballot paper and the aggregate rateable value of each property class cast in favour of the question on the ballot paper
A business improvement district can be established only if the outcome of the ballot confirms that a majority of both the number of persons voting and the aggregate rateable value have voted in favour of the proposals. This mechanism provides protection against the setting of excessive levies. Once a property owner business improvement district has been established, the relevant billing authority will be responsible for issuing bills and collecting the levy, thereby maintaining consistency with the existing ratepayer business improvement district and business rate supplement. The authority will also be required to hold a separate business improvement district revenue account. The billing authority can also veto the establishment of a business improvement district where they feel the activities of the business improvement district conflicts with any of their policies or where they consider that there is a significant and inequitable financial burden on a particular class of property owner.
Noble Lords may also wish to note that there is a right of appeal against the ballot where a material irregularity appears to have occurred. A request to the Secretary of State to declare the ballot void must be made within 28 days of the notification of the outcome of the ballot and can be made by the billing authority, the business improvement district proposer or a person representing at least 5% of those eligible to vote. These regulations allow for the creation of property owner business improvement districts, which I believe will offer a welcome addition to tools this Government have provided to regenerate the high street and help businesses to grow, and will do so via a set of rules and safeguards built on tried and tested ratepayer business improvement district regulations. I commend this order to the House.
My Lords, I thank the Minister for introducing these regulations. I should make it clear that we support the proposition of property owners, the business community and local authorities working together to improve the local trading environment. BIDs themselves have a cross-party pedigree in that it was the Conservative Government who commissioned research in 1997 to assess how they might be established and it was the former Labour Government who legislated for their introduction. I was going to ask the Minister how many BIDs are currently in existence, but the noble Baroness answered that question. I think there are more than 180, with some in their second and third term.
BIDs were driven by a ballot of all non-domestic ratepayers in a proposed area. The idea of a property owner BID is driven, as the name suggests, by the ownership of property rather than its occupation, although a person could qualify under both. Property owner BIDs have developed from the Portas review of high streets. It is understood that the legislation will allow a property owner BID only for areas where there is both a ratepayer BID in place and a business rate supplement being levied. The noble Baroness confirmed that in introducing these regulations. A business rate supplement can be levied by upper-tier authorities in order to fund economic development projects. The Explanatory Note and the Minister today remind us that a business rate supplement is being levied at present only by authorities in London for Crossrail, so it would be possible to have a property owner BID only in London at the current time. Can the Minister say more about why the BRS is seen as a prerequisite for a property owner BID? What does she see as the timing of looking at developing this so that other areas of the country have an opportunity to undertake the same sort of investments? Are there any proposals for the BRS to be levied elsewhere? If not, it would seem that the rest of England is missing out. Perhaps the noble Baroness can tell us what the position in Scotland, Northern Ireland and Wales is in this regard.
I have a number of other questions. Where the property ownership involves a freeholder or a leaseholder, or possibly a sub-lessee, as well as a tenant, who will have the right to vote in a ballot for a property BID? As I understand it, the noble Baroness suggested that it would be for the proposer of the property owner BID to decide who should be on the electoral roll for these purposes and subject to the levy, but it would be helpful to have some clarification of that. Would it always have to be the same type of ownership? Would it be possible for a proposer of a BID to say that it would be freeholders in some instances and long-leaseholders in other instances who would be involved in these arrangements?
I thank the noble Lord, Lord McKenzie, for his constructive comments and questions and for the interesting history that has led to this on a cross-party basis, which is always good. The noble Lord’s first question was why BRS was a prerequisite. It is because that was how the legislation was framed back in 2009. He also asked whether it would be possible for the proposer to decide to levy only on leaseholders or freeholders. The answer is yes: it is at the discretion of the BID proposer to decide who should be levied.
Could I clarify that with the Minister? Can the promoter of the property-related BID choose that it is a freeholder in one case, long leaseholders in another and a sub-lessee in another? What sort of information is expected and on what basis will those judgments be made?
I will get the answer to that in a second. I am guessing that it would not be possible for him to discriminate against somebody because they were a freeholder and that it would be in relation to the types of property that were in the BID.
The noble Lord’s other question was what would happen if there were outstanding contracts when the five years were up. The BID body is expected to manage its business while recognising the potentially limited timeframe in which the BID will exist. It is a short timeframe but it can be renewed. The noble Lord also asked about conflict.
My Lords, the answer to the question of whether the proposer can differentiate between leaseholder and freeholder is yes, but he has to give a reason why in the proposal. I am sorry, I have completely lost my stride, but I am sure the noble Lord will tell me if I have missed any questions out.
There was also a question on multiple ownership and what would happen if more than one person was levied and voted in the ballot—that is, a leaseholder and a freeholder both have an interest in the property. There could be more than one property owner in respect of the same hereditament. The legislation provides that in those instances the rateable value is divided between the owners for the purposes of calculating the result of the ballot.
On the question of what happens if a BID conflicts with an existing ratepayer BID, the only conflict that could occur would be around what each BID is doing. In practice, we would not expect this to happen and would expect proposers of a property owner BID to be talking to an existing BID company about the value that they could add.
The noble Lord asked whether there are plans to levy business rate supplements elsewhere. Not that we are aware of. We have addressed the question of outstanding contracts and when the five years are up. I think that I have answered all the questions but I am very happy for the noble Lord to intervene if I have not.
I am grateful to the Minister for a good set of replies. Can I come back on the issue of multiple ownership? Let us assume that there was a person who owned two freeholds and each was occupied directly so the divvying up of rateable values was not an issue. When it comes to a vote, you look at the numbers of voters and the aggregate rateable value. If someone owns two properties, are they counted twice for those purposes or only once?
I want to make one final point on the issue of terminating arrangements. Say you had a property owners’ BID—which might be expected to last for three years if there are two years gone of the other one—but the ratepayers’ BID was terminated early for some reason, that would automatically bring to an end the property owners’ BID. Obviously, if that was prior to its expected end, there could be contractual issues. How might that be resolved? Have those situations arisen under ratepayers’ BIDs?
I am guessing that they would follow the same legal arrangements as any contractual arrangements and be dealt with in the proper legal way—breach of contract, for example.
My Lords, zero-hours contracts are not always a bad thing and they suit certain people, but, certainly, anybody who is working for a local authority needs to be on the minimum wage.
My Lords, there is a clear pattern here: just yesterday, we had a report from the LSE and the ISER looking at the effects of direct tax benefits and pension changes introduced under this Government. Surprise, surprise: it concluded that the poorest half of the income distribution lost out and the top half gained, and that these changes were regressive. To add to that, the Government have not only imposed the biggest funding reductions in the public sector on local councils—with funding cut by 40% over this Parliament —but they have ensured that those areas with the greatest need are shouldering the largest burdens. The noble Baroness cited some figures, but if one looks at what has happened throughout this Parliament, one sees that spending power—the Government’s favourite measure—has been cut for Liverpool by 27%, for Hackney by 27%, for Manchester by 26% and for Birmingham by 23%. However, lo and behold, for Waverley Borough Council and Wokingham Borough Council it has increased by 1%. If that is fair, what definition of fairness is the Minister using?
My Lords, I take the noble Lord’s point about ring-fenced grants to councils such as Liverpool and Manchester, which lost a lot of theirs. Councils such as Trafford never actually had many ring-fenced grants so they had little to lose in that way. However, that effect has been dampened over the years so that it is not a cliff-like reduction. This Government have a different approach, which tries to rebalance the economy and puts growth at the heart of everything they do, including funding for local areas.
My Lords, this order is one of a number of statutory instruments that will put in place new arrangements for the audit of relevant authorities as set out in the Local Audit and Accountability Act 2014. I do not wish to take up your Lordships’ valuable time by repeating in this debate the arguments that were put forward during the passage of the 2014 Act supporting the abolition of the Audit Commission. However, it remains the view of the Government that the arrangements that we are putting in place, including this order, will create a more efficient audit system, giving greater responsibility to local bodies whilst providing greater opportunities for local people to hold those bodies to account. They will also save £730 million over the five years between 2012 and 2017 and an estimated £1.2 billion over 10 years.
On the specifics of the instrument being considered here today, the order delegates certain of the Secretary of State’s powers in relation to the eligibility and regulation of local auditors to the Financial Reporting Council, which is the independent regulator responsible for the oversight and development of corporate governance standards. Let me provide a little context on its background. The Financial Reporting Council is a company limited by guarantee that is partly funded by the Government. You might also wish to know that its board of directors is appointed by the Secretary of State for Business, Innovation and Skills, and it already carries out delegated functions, similar to those that I will shortly outline, for statutory—that is, company—audits. The functions that this order delegates to the Financial Reporting Council include: authorising professional accountancy bodies to act as recognised supervisory bodies for local audit; authorising professional accountancy bodies to offer a local audit qualification; undertaking significant public interest disciplinary cases and, where appropriate, imposing a range of sanctions on those auditors found to have committed misconduct; carrying out an additional level of oversight and monitoring of audits of significant local public bodies, defined by regulations as “major local audits”; and reporting to Parliament annually in relation to inspections. The order closely follows the existing delegation order for statutory—that is, company—audit approved by Parliament in 2012 and, in article 10, makes a small amendment to that order to ensure that the same minimum consultation period applies to Financial Reporting Council consultations whether the consultation relates to company audit or local audit.
How does the order fit into the new audit framework? These arrangements will simplify the rules that currently apply to auditors by removing unnecessary duplication from the system. At present, audit firms have to work under two regulatory systems—one set by the Audit Commission and the other by the Companies Act 2006. The new audit framework largely replicates the Companies Act regulatory regime, with which auditors are already familiar, to cover local audit. That is not to say that we are removing necessary safeguards or compromising the quality of local audit; the work of the auditors will not change. The National Audit Office will set out what auditors should do to fulfil their statutory duties and, as set out in this order, where appropriate the Financial Reporting Council and professional accountancy bodies will monitor the quality of audit, as they already do for the private sector.
Through this order, the Financial Reporting Council will take on the responsibility for authorising professional accountancy bodies to act as recognised supervisory bodies. These bodies will, in turn, have responsibility for deciding which firms are eligible to undertake local public audit and for monitoring compliance with the rules and practices that they have established, and also with auditing standards. The Financial Reporting Council will also have responsibility for the recognition and supervision of audit qualifications that are not recognised by the Companies Act 2006. In approving an additional qualification, the Financial Reporting Council will need to assess whether it meets the minimum requirements as set out in the Local Audit (Professional Qualifications and Major Local Audit) Regulations 2014—SI 2014/1627—which were laid on 27 June and are subject to the negative procedure.
The monitoring of major local audits will be covered by the Financial Reporting Council. The Secretary of State has specified in the regulations that I have just mentioned which relevant authorities will have their audits defined as major local audits. Briefly, the conditions are that an audit of relevant authorities with either total income or total expenditure above £500 million, or an audit of relevant authorities with local government pension funds with assets in excess of £1 billion or more than 20,000 members, will be considered to be a major local audit. The Financial Reporting Council will also, subject to consultation, be able to give a direction to a relevant authority specifying that its audit will be a major audit.
Why do we need this order? Without the order, the Secretary of State would retain oversight of the whole regulatory framework for local auditors, thus continuing an anomalous position and a dual regulatory regime. As I said earlier, the powers being delegated to the Financial Reporting Council here largely mirror those delegated by the Secretary of State for the Department for Business, Innovation and Skills to the Financial Reporting Council for oversight of the regulation of statutory—that is, company—audit.
Before the introduction into Parliament of the measures included in the 2014 Act, we consulted widely both on the broad policy approach and also in more depth on the proposed framework, through the publication of a draft Bill. Noble Lords may also recall that a parliamentary pre-legislative scrutiny committee provided detailed scrutiny of what is now the Act while it was in draft form. During the Bill’s passage through Parliament, we also provided draft regulations on several of its key provisions to the parliamentary Bill Committee, and last autumn we undertook an interactive public consultation exercise. Over 130 replies to the consultation were received in total, of which 62 commented on the regulatory framework, including the main audit firms which currently carry out local audits and which have been engaged throughout this process.
Nearly 80% of the relevant replies were in favour of the approach proposed for the regulatory framework. This reflects the work that we undertook before consulting, in having regard to the existing statutory framework and engaging with key stakeholders through a working group to make sure the proposals reflect their views. It was found that 71% viewed the Local Audit (Professional Qualifications and Major Local Audit) Regulations as providing an appropriate framework to allow a body to develop a suitable qualification for local audit, and 63% agreed that the proposed thresholds were appropriate to capture the audits of significant local bodies.
Following comments made during the consultation about the role of the Financial Reporting Council, we made minor changes to the order being discussed here today. It now includes a requirement that the Financial Reporting Council consults any bodies whose audits it decides should be subject to additional monitoring by being treated as a major local audit, even though it would fall outside the conditions described as defining a major local audit in the regulations I have just mentioned.
I commend the order to the Committee.
My Lords, I thank the Minister for her very full introduction to this order. As has been explained, it puts in place elements of the regulatory framework for the local audit regime. This involves delegating certain of the Secretary of State’s powers to the Financial Reporting Council. As would have been apparent from the debate in another place, we do not oppose this order. As has been said, it is about removing duplication and an attempt to replicate the Companies Act regime for local audit. However, I have one or two questions.
The Audit Commission is to be abolished in 2015. What arrangements are in hand for the management of the audit contracts that were outsourced and are not due to come to an end, I think, until 2017? Has a decision been taken on whether or not they are to be extended? I think there was the option of extending them for a further three years. Paragraph 7.1 of the Explanatory Memorandum makes reference to an “open and competitive market”. Could we therefore have an update on how many different firms are currently undertaking local audit work and how many were eligible to bid under the Audit Commission’s final transfer? Perhaps we could also have an update on the ultimate disposition of those audit contracts—I think some of them were bundled on a regional basis—and how they were transferred, and whether any of those arrangements have had to be unpicked and retendered for one reason or another.
As the noble Baroness explained, the FRC will have responsibility for monitoring “major local audits”. This term has been defined in the recent set of negative regulations, which have been referred to. Can we be told how many major local audits there are expected to be? Reference has been made to the consultation exercise from last autumn and comments received from the LGA about the Financial Reporting Council being involved in local authority audit policy. Would the Minister care to comment on that?
On the Government’s suggested savings, can we be told how much will be saved as a result of the audit arrangements already contracted out by the Audit Commission? I think that was a bone of contention when we debated the Bill.
Subject to the answers to those questions, as I said, we have no difficulty with this order and I am happy to support it.
I thank the noble Lord for being the only person present for the beginning of the debate, and for the points he has raised.
He asked how many local bodies will be undertaking major local audits. We estimate that there will be around 100 to 150. He also asked whether there would be an extension to the existing audit contracts that are in place, to allow for the transition phase. We have asked the LGA to set up a company which will manage existing audit contracts, running to 2017, so I hope he is satisfied by that. We will make a decision on whether or not to extend those contracts in due course.
I think I have answered both his questions. Was there another one?
I think there were one or two. There was one about the savings. I think the figure of £730 million was referred to. I was trying to understand how much of that, if any, relates to the work that was already done by the Audit Commission outsourcing its contracts in 2013 and perhaps 2014 as well. I was also interested in getting an update on how those contracts were actually dealt with when the Audit Commission contracted them out. I do not think they were all done in one contract; I think they were done in a series of regional contracts but I do not have in my mind the totality of how that all worked. Have any of those contractual arrangements had to be unpicked? I think the arrangement was that they were contracts between the audit companies and the Audit Commission.
I am certainly grateful for the update about the LGA being the entity that will monitor and manage those outstanding contracts, and that there is not yet a decision on whether or not they will be extended. If the Minister were able to pick up some of those other points, that would be helpful.
I apologise to the noble Lord. On the £730 million-worth of savings that we have estimated over the next five years and the point that the noble Lord raised about the previous period, we estimate that there were about £200 million-worth of savings. I will write to the noble Lord with an update on who has the contracts and how they are located.
I have a correction. The LGA will set up a separate company, and we are working together for it to do so.
To be clear, is that separate company going to manage the existing contracts as well as possibly looking to amalgamate or centralise contracted audits in the future, or is it just one of those functions?
I understand that a transitional body will be in place to run the contracts at this stage. If the noble Lord is not entirely satisfied with those slightly hurried answers, I am happy to write to him.
My Lords, these regulations amend the Town and Country Planning (Fees for Applications, Deemed Applications, Requests and Site Visits) (England) Regulations 2012. The regulations have been approved in the other place and, if approved by the House, would come into effect at the end of this month. The regulations introduce a new level of fees payable for prior approval applications for permitted development for change of use and associated physical works.
The coalition Government are committed to reducing planning regulation and ensuring that the system for securing planning permission is proportionate to the potential impact of any development. We want to ensure that the best use can be made of existing buildings and that we deliver the homes we need without unnecessary regulation. To support these key aims, we are increasing national permitted development rights so that appropriate development can take place more quickly.
In the Budget document, we set out the three-tier planning system. A full planning application is appropriate for larger-scale developments with the greatest impact on neighbours, the wider community or the environment. Permitted development rights, on the other hand, remove the need for a planning application. They are appropriate for small-scale changes and some strategic development where the impact is less. Permitted development rights with prior approval provide an intermediary role between permitted development and a full planning application. This is a simpler and cheaper process where the principle of the development has been established but certain specific issues still require local consideration.
In April, an order came into force introducing further flexibility for owners to make better use of existing buildings and to help increase housing supply. These new permitted development rights include enabling shops and agricultural buildings to change use to homes. For the first time, they also allow the limited building works necessary to deliver the new homes.
These permitted development rights are subject to prior approval, providing applicants with a less complex and less costly process than a full planning application. Prior approval for change of use normally requires the local planning authority to consider matters such as the impact on transport and highways and contamination and flood risks. By allowing some physical works, as well as the change of use, the local planning authority will also have to consider the proposed design and external appearance of the building. For example, an existing shop front with a large plate glass window is unlikely to be appropriate for a home without some alterations. However, it is important that any resulting frontage is still in keeping with the area. It may be adjacent to other shops, and the local planning authority will have to ensure that the design does not have a detrimental impact on an area.
Prior approval for change of use requires the local planning authority to consider specific issues, and we introduced a fee of £80 last year for these applications. These regulations now provide that a fee of £172 is payable for prior applications where the local planning authority considers not only the specific impact of the change of use but the design and appearance of building works associated with that change of use. This recognises that these applications involve some additional work for the local planning authority compared to a straightforward change of use.
These regulations will apply to the flexibilities introduced in April allowing change of use from shops to homes and from agricultural buildings to homes together with associated building works. The fee of £172 for prior approval is a considerable saving to the applicant. If we had not introduced these permitted development rights, a farmer making a planning application to convert a barn to three new homes would have faced a fee of £1,155, which is calculated as three times the planning application for a dwelling-house. When we consulted on the package of increased flexibilities for change of use last summer, we set out our intention to introduce a £172 fee for prior approval applications where some physical works are also permitted.
It is important that we continue to take steps to simplify the planning system and make the application process proportionate to the impact of development. This modest fee for a prior approval application for both change of use and some building works is a saving for developers trying to make better use of their existing buildings and will help planning authorities in meeting the costs of these applications.
I commend the regulations to the Committee.
My Lords, I again thank the Minister for explaining the regulations. As we have heard, they are focused on the very narrow point of the level of fee applicable to permitted development rights for change of use where prior approval is necessary and where limited building works are associated with the change of use. The fee is to be £172.
The Minister will be aware from the debate in another place on these regulations that we are not in agreement with the underlying policy involving this particular use of permitted development rights. As my honourable friend the shadow Planning Minister Roberta Blackman-Woods put it,
“we are not against allowing change of use, but we believe that it is best achieved through adherence to local plans”.—[Official Report, Commons, Sixth Delegated Legislation Committee, 8/7/14; col. 5]
The Government’s Greater Flexibilities for Change of Use consultation proposed five different circumstances but, as I understand it, only two are the subject of this order. The fee levels apply where the change of use can involve some building work: one is where the change of use is from shops or financial and professional services buildings to a dwelling-house, and connected building work is involved; the other is when existing buildings currently used for agricultural purposes are to be used as a dwelling-house, and building work connected with the change of use is involved. In each case, certain building work is permitted. Can the Minister say something about the parameters under which that is considered? When is it connected to the relevant provision and when does it go beyond that? There are obviously plenty of opportunities for abuse of these provisions. I would like to understand how that matter is to be approached. In the case of change of use of shops, it appears that prior approval will be required to cover design, transport and risks of flooding, as the Minister explained. For agricultural buildings, prior approval will focus on siting and design. As I understand it, the prior approval is not necessarily looking at the same thing in each case. It has to look at specific things. That, presumably, is tucked away somewhere in regulations. I hope that the Minister will enlighten me on that.
One of the other flexibilities not covered by this fee proposal relates to the change in building use from buildings for agricultural purposes to new state-funded schools. How many times has this flexibility been used to date? Has it been used to facilitate free schools? I reiterate that we have difficulties with the underlying policy but, subject to the points I have made, we will not oppose these regulations.
I again thank the noble Lord for taking part in this two-way debate. Our objective is basically to simplify the planning process, thereby making it easier and cheaper for developers who want to carry out small-scale works with a limited impact.
I was asked about the scope of a development. I understand it to be within the permitted development rights of the said dwelling. If it is anything other than that, I will let the noble Lord know. I hope I have responded to the point that he made but I take it to be within permitted development rights, which will, of course, be different for each dwelling.
Permitted development with prior approval provides developers with a less complex and less costly process than a full planning application. These regulations support that approach. As regards what building works would be allowed under this provision and what would not, work which is required to deliver a new use would be allowed and, I think, probably nothing beyond that. Therefore, in the case of a shop front, a smaller window as opposed to a large frontage would be allowed. If it was a barn, I am guessing that a suitable front door might be allowed but nothing beyond what would be required to change from the old use to the new use of dwelling. I think that addresses the point about not going beyond the original intention of the regulations.
I will have to write to the noble Lord about the point he made on schools. I have some experience of this issue in terms of free schools. I know that if local authorities have land or existing schools available, negotiations can be entered into but, as schools are not dwellings, I will have to write to him on that. Does that address the issue?
I am grateful to the noble Baroness. Her response touched on the key points. As regards the point about whether the provision is connected with the building works, change of use from, say, an office to a dwelling is one thing, but I guess that what would be permitted to facilitate the change of use of agricultural buildings could be more contentious. Did the noble Baroness say that these provisions were set down in detail in the regulations or in the permitted development rights themselves?
I understand that it is within the permitted development rights of those buildings, whatever those permitted development rights are. If that is not the case, I will write to the noble Lord. However, I will let him know whether or not the provisions are set down in the regulations.
I am grateful. Perhaps the noble Baroness can write to me on the issue of schools. I was prompted to inquire because the terminology now used is “new state funded schools”. I have a feeling that we had a bit of run around this because we originally saw a specific reference to free schools, so I was interested in finding out what the current situation was on that. I have, however, no further queries and I am grateful for the response.
I should clarify this because there is something in the recesses of my mind. Where local authorities have suitable buildings, and free schools are being set up, they should try to assist in making those public buildings available, but I will clarify that in a note.