Housing and Planning Bill

Lord Beecham Excerpts

Monday 25th April 2016 Lords Chamber

[Baroness Evans of Bowes Park (Con)]

My Lords, we had a wide-ranging debate in Committee on competition. My noble friend Lady Williams has reflected on concerns such as whether the private sector could have an inappropriate influence on decisions for planning permission. She has also considered the various reports from the DPRRC and, as a result, we have laid amendments which address many of the issues raised in your Lordships’ House.

Amendment 120A does three things. First, as recommended by the DPRRC, it confirms that the purpose of the clauses is to enable pilots in discrete areas to test the benefits of introducing competition to planning application processing. Secondly, it addresses another committee recommendation by setting the maximum length of pilot schemes. Discussions with local authorities and professional bodies have suggested that a maximum period of five years is prudent to allow for lengthy applications to go through the whole process, including appeals if necessary. Thirdly, local authorities have said the pilots will not be a level playing field if designated persons only process planning applications attracting a fee and local authorities are left to do the other applications connected to the development of the sites, as those connected applications tend to attract little or no fee.

Proposed new subsection (1A)(b) enables regulations to provide that connected applications can also be processed by designated persons. Amendments 121A, 121B, 121D, 121F, 122B, 122C, 123A, 123C and 123F make consequential changes to enable connected applications to be processed by designated persons.

The DPRRC has said that we should put a list of connected applications in the Bill and take a power to add to it. I am afraid in this regard we disagree. Our recent engagement work with over a hundred authorities has highlighted a concern about connected applications. It is right that we now address it with the sector and agree a list to be included in regulations rather than impose an unworkable list now.

In Committee we heard a clear message from your Lordships that a decision on a planning application must be a democratic one by a local planning authority. Authorities cannot be allowed to delegate this decision to designated persons and nothing should bind the authority’s decision. We have always been clear that decision-making will remain with the authority in a pilot area. However, I want to directly address the points noble Lords made in Committee.

Amendment 121C prevents us including in regulations anything that allows or could allow an authority’s decision-making function to be carried out by a designated person. It also puts beyond doubt that any advice, report or recommendation from a designated person will not be binding on the authority responsible for determining a planning application. To support this, Amendment 123D removes Clause 146(2)(g), which was of particular concern to noble Lords in Committee.

Noble Lords wanted more detail about how the pilots would operate and, ideally, to see draft regulations. It is essential that the pilots are designed with local government and professional bodies. We have started an extensive dialogue with planning professionals that has already involved over a hundred local authorities. None the less, I want to respond to noble Lords’ concerns, so Amendment 121C also places a duty on the Secretary of State to consult before making the first regulations to implement pilot schemes. Combined with other amendments, this means that your Lordships’ House will be able to debate the detail of how the pilot schemes will operate after it has been co-designed and consulted on with local government.

Amendment 121 implements a recommendation from the DPRRC that the Secretary of State should be under a duty to bring back to Parliament an evaluation of the pilots and set out any conclusions that can be drawn from them.

The DPRRC recommended that the affirmative procedure should apply to all regulations made under Clause 145. We recognise that the pilots represent a significant change to the planning system and that there are understandable concerns about their potential impact. We therefore agree that the affirmative procedure provides the appropriate level of scrutiny in certain circumstances. However, the affirmative procedure is not appropriate for every exercise of the powers. We may need to quickly make small changes to procedural rules to address something that is not working as effectively as it should.

In these circumstances, we think that the negative procedure is more appropriate. This is consistent with the negative resolution procedure that applies to the development management procedure order, which sets out the procedural rules for processing planning applications. Amendment 135A gives effect to this approach and applies the affirmative procedure to the power to specify the period after which each pilot will cease, specify the description of planning applications which may be processed by designated persons during the pilots, disapply or modify planning enactments to implement the pilot, specify what are connected applications in addition to reserved matters applications during the pilots, set fees during the pilots and require data sharing during the pilots.

Let me now directly address two concerns raised by the DPRRC in its 28th report. The committee said that the Government had failed to give effect to the use of the affirmative procedure on the first exercise of these powers. However, I am afraid that we disagree. For pilot schemes to be run, the first regulations will need, for example, to set out the length of them, the descriptions of planning applications that can be processed by designated persons and how fees should be set. Amendment 135A applies the affirmative procedure for these matters.

The committee also maintained its position that the Government should always consult before making any regulations and that every exercise of powers under Clauses 145 to 148 should be subject to the affirmative procedure. I note that the noble Lords, Lords Beecham and Lord Kennedy, have tabled Amendments 121CA and 135D to this effect, which they will speak to shortly. Again, I disagree. As I have said, the pilots are complex and we may not get the design perfect from the outset. This is the very reason why any Government use pilots to test their new approach. Consulting on every use of regulations combined with using affirmative procedures for them could snarl up the effective operation of the competition pilots, particularly where small changes to procedural rules are required. It would take six months each time we consult and use the affirmative procedure, equivalent to a 10th of the length of the five-year pilots. I appreciate the spirit and intention of the committee’s recommendations, but we believe that they are simply impractical. I hope that your Lordships will agree that we have taken the committee’s recommendations and applied them in a practical and effective way.

Amendment 137 means that regulations made under Clause 145 will not be treated as hybrid and will be subject only to the affirmative procedure usual for this type of scheme. We are implementing a pilot scheme, not a permanent change to the planning system. We are consulting on the first regulations before implementing any pilots, and local communities will have an opportunity to comment. These clauses are about processing, not deciding applications. Crucially, decisions remain with local planning authorities, so I suggest that private rights are not affected. In any case, it is entirely the applicant’s choice as to whether to stay with the existing authority provider or select a designated person. I beg to move.

[Lord Beecham (Lab)]

My Lords, I congratulate the noble Baroness on racing through the 15 amendments in her name in such a short time and so clearly. The amendments in my name and that of my noble friend Lord Kennedy are Amendments 121CA, 121G and 135D. The noble Baroness has referred to Amendment 121CA, which provides that the consultation should not be confined to the first regulations but should apply to any sets of regulations that might emerge. Amendment 121G would require a full list of the type of applications that constitute a connected application to be defined in regulations by the Secretary of State, while Amendment 135D would require all regulations made under Clause 145 to be affirmative.

The Government’s intention to extend their fetish with privatisation to the provision of planning services emerged only at the last minute during the Bill’s Report stage in the Commons. It was not the subject of prior consultation and, like the Chancellor’s recent announcement about education, seems uncannily more like Lenin’s concept of democratic centralism than the localism which Ministers proclaim is their watchword.

It is instructive to consider the material produced by the Government in support of their proposals. The Bill’s impact assessment proclaims the importance of the planning application process being,

“resourced and organised in a way that allows an efficient and effective service to be provided”,

and cites fee levels as “an important factor”. Fee levels are of course prescribed by the Government themselves. The document stresses the importance of driving down the costs of processing applications and notes that there is,

“cross-sector concern that resource constraints are affecting the overall service”.

Typically, this so-called impact assessment contains no evidence as to the impact of current or future costs on the performance of the planning process, although it affirms that,

“adequately resourced planning departments depend on an appropriate level of income”,

which it fails to define. There is also no attempted definition of,

“well organised, efficient and low cost services”,

even though the costs are determined by the Government.

--- Later in debate ---

[Lord Porter of Spalding (Con)]

My Lords, I support Amendments 120A and 121. I was going to try to stick to the proper script but, given that everybody before me has left the running order and spoken about the things they are really interested in, I am going to do the same. First, I thank my noble friend the Minister for listening to what was said last week and to what local government has been saying for a number of weeks, and for clarifying how some of this pilot stuff will work.

Since I am on my feet, I am going to speak to fees. I am in favour of private sector competition on the basis that I honestly believe it will drive fees up. It is the first time I can recall having private sector competition to drive up the cost of a service, but I think this will do it. At the moment, we are spending about £150 million a year as taxpayers subsidising the planning system, and we have spent £450 million over the past three years doing it. Clearly, the fee structure does not recoup the full costs. If the private sector is going to come in and compete against us, it is going to want at least to cover its costs. Even if it is doing it for a few years as a loss leader, it is not going to want to lose a lot of money, so local government should be able to get its fees set at a much higher rate. That will allow us to staff our planning departments to a much more suitable level, given the demand that will be coming through, and that will allow local government to win the competition hands down because the public will trust what we are delivering and any sensible developer will want to go through an established route rather than risk competition in the private sector.

The noble Lord, Lord Beecham, said that an impact assessment had said that competition reduced the cost of refuse collection by about 20%. Ours has been brought back in-house since I have been leader and that has saved 20%. While private sector competition should be encouraged, it is not always the route that the final decision should go down.

[Lord Beecham]

On a point of clarification, when the noble Lord talks about council fees increasing in the way that he has described, is he suggesting to the Government that they should change the position and no longer fix the fees that councils should charge? That would be a necessary precondition of that occurring.

[Lord Porter of Spalding]

If we are truly about competition, the people in the competition should be the people setting the charges for that competition. Local government will set appropriate fees. All the Government need to say is, “This is the maximum profit you can make”, and we will all stick to those rules. I am sure local government will be able to drive down costs while putting fees up. As my noble friend Lord True said, we will be doing more shared management, and such arrangements will save some margin, but that will still not be enough to cover the full costs of the planning application. If we are able to put our fees up to recoup the full costs, so be it—bring on the competition. Like my noble friend Lord True, I will probably volunteer to pilot a rural competition.

--- Later in debate ---

[Lord Shipley]

My Lords, I speak in support of the noble Lord, Lord True. I said a number of things in Committee on this group, and Amendment 121E in particular, about the independence of the advice being given, the role of planning officers employed by a council to comment on the report that has been written, and the importance of the general public understanding that independence and due probity is being followed at all points, because the issue of public trust is critical. For the public to have any confidence in the planning system, a robust firewall must be in place so that those writing reports are, and are seen to be, independent of applicants and subject to all the relevant codes of conduct that apply to professional planners.

It is vital that the people whose reports the community’s elected representatives are being asked to trust are people whom the public trust, too, especially if neither the public nor the council members are able to choose them. Local authorities can contract out these services, and some do, but they must nevertheless guarantee that alternative providers are subject to the same quality, accreditation, competencies and code of conduct that would apply in the public sector. Ensuring that independent providers are qualified to work in the public interest is a necessity, and must apply not just longer term but during the pilot period that we discussed under the previous group.

[Lord Beecham]

My Lords, I have a good deal of sympathy with the points of both the noble Lords, Lord True and Lord Shipley. I am concerned how it would be seen by the public generally, but also by those applicants who have paid for a report to be prepared, which may make a recommendation. The decision will certainly be made by the committee. That is more or less the position that operates now in the existing system. Sometimes, council planning officers’ recommendations are not accepted by the committee, and they may help appellants on appeal. However, if you are paying for that advice as an applicant, it creates a different ambience altogether, it seems to me. It makes the whole process rather more confusing and difficult for the applicant, as well as for the local authority. I hope that the noble Baroness will look again at how the process works, because it is fraught with danger for both the authority and public understanding of what is happening.

[Baroness Evans of Bowes Park]

My Lords, I will not repeat the detail of what we have already done to strengthen Clauses 145 to 148 but turn straight to the amendments.

Although I cannot accept Amendment 121E from my noble friend Lord True, I agree with its intent and commit to take the issue away and address it in the design of the pilots and regulations. Authorities have said clearly to us that it will be very inefficient if designated persons do all the background work but they are required to review it all and then pull together their own recommendation in a report that they write. They are not saying to us that they must make the recommendation or write their own report. Instead, they are saying that simple and efficient mechanisms are needed to ensure that quality and impartiality are maintained. This amendment could lead to inefficient behaviour.

Authorities have also said that designated persons must share some of the risk and cost of defending appeals. I am concerned that the amendment could make it harder to argue that designated persons should share any risks which will concern authorities. There is a complex set of interrelated issues which we need to explore in detail with authorities to avoid perverse behaviours and outcomes. We will explore a range of safeguards. I ask noble Lords to let us explore them with authorities and bring them forward in regulations. We would be very happy to have further discussions with my noble friend and others about how we can best do that. I hope that reassures him that we will take this away.

I am afraid I cannot accept Amendment 122 from the noble Lords, Lord Kennedy and Lord Beecham, limiting ‘designated persons’ to local authorities and public bodies and ruling out private sector companies and individuals. This amendment says, “It is the public sector way and there is no other way”. In contrast to noble Lords, the dozen or so local authorities considering being a pilot area are not arguing for the exclusion of the private sector. They believe that they can compete with it and, indeed, beat it. If that is the case, what have local authorities got to fear? If they provide the best service, they will hold on to the business. We believe that the concerns at the heart of this amendment are about any potential for the private sector to have undue influence on planning decisions, and we believe these can be managed.

We have strengthened planning authorities’ retention of decision-making during the pilots following concerns expressed in Committee. Our amendments mean that regulations cannot contain anything that allows an authority to delegate decision-making to designated persons and make clear that advice from designated persons will not be binding on authorities. However, other safeguards will also exist. We will set out high professional standards, as the noble Lord, Lord Shipley, outlined, drawing on codes of conduct such as that of the Royal Town Planning Institute, which requires competence, honesty, integrity and independent professional judgment from its members. We will remove someone’s designation where they fail continually to meet these high standards. We expect to prevent designated persons processing applications in which they, their company or its subsidiaries have any interest. I have committed to explore how we can maintain high-quality, independent advice being presented to decision-makers and having designated persons list their interest with authorities, as suggested by my noble friend Lord True. Section 327A of the Town and Country Planning Act 1990 provides that where the necessary procedures have not been followed appropriately an application can be declared null and void. We believe that enabling the private sector to compete with local planning authorities is likely to drive greater reform.

Some in local government have said that it may not be possible to process some applications, such as householder applications, for a price even close to the fee. Our initial dialogue with the private sector indicates that it might indeed be possible to process such applications, and we want to test this belief.

Finally, I cannot accept Amendments 123 to 126 from the noble Lords, Lord Kennedy and Lord Beecham. We all want a planning system fit for the 21st century, so we believe that, in order to achieve it, it would be wrong not to explore alternative delivery models for handling planning applications. Currently, local planning authorities have a monopoly which denies the user choice and does not incentivise service innovation and the provision of the most efficient and effective service. Alongside this, reform of planning departments lags behind most other local authority services. Local authorities can do a lot more to transform their planning departments. Indeed, many have introduced new ways of operating and have shown that performance can be improved and costs reduced, but we believe that more should follow their lead.

We have heard concerns about the undue potential influence of the private sector in the pilots. My noble friend Lady Williams has laid amendments to strengthen local authorities’ decision-making function, and I have set out other safeguards we intend to put in place. I have also committed to explore proposals raised by my noble friend Lord True. Your Lordships’ House has been concerned about the lack of detail about how the pilots will operate. Our amendments mean that we will debate the regulations in this House following a consultation before pilot schemes can come into force. Noble Lords have queried whether we intend to evaluate the pilot, and we have laid an amendment committing us to sharing our assessment of the pilots in the House. The RTPI and the LGA rightly highlight areas where we need carefully to consider the design of the pilots, and we will work with them to explore their ideas, but they have not opposed the principle of the pilots. Local authorities are telling us that we are right to challenge the current delivery model and, as we have heard from my noble friend Lord Porter, some want to be pilot areas. Despite this, the noble Lords opposite want to say that they cannot.

We listened very carefully to the debate in Committee and today, and I believe we have taken significant steps to ensure that the pilots are workable and to address many of the concerns that noble Lords have raised. I hope that, with these reassurance and the commitments I have made in these remarks, the noble Lord will withdraw the amendment.