Neighbourhood Planning Bill

Lord Beecham Excerpts

Committee: 1st sitting (Hansard): House of Lords
Tuesday 31st January 2017 Grand Committee

[Lord Bourne of Aberystwyth]

With respect to the noble Lord, I am not sure we are. The noble Lord has been around the planning block a few times and he will know that occasionally planning decisions have national significance. Not least for that reason, we need to retain the power of the Secretary of State to recover appeals in limited circumstances.

[Lord Beecham (Lab)]

Perhaps I may raise a slightly different point. The noble Lord has given a sympathetic response to the question of resources, but looking at subsection (3) of the proposed new clause set out in Amendment 1, there is an issue which I do not think he has addressed in his reply. It relates to the case where,

“it is deemed necessary to override a neighbourhood plan”.

The amendment then calls for specific action. It says that,

“the Secretary of State must … have regard to the policies of the neighbourhood development plan”,

and,

“policies on employment opportunities … and … inform the local community of the number of houses and types of housing required”.

That is not an onerous request. It may be that the noble Baroness would be satisfied with an assurance that that would be the Government’s policy rather than necessarily writing it into legislation, but, with respect, the Minister should deal with those points. He may consider that a letter would do. One way or another, it is rather a different point from some of those that have already been aired. The Government could be clear about it at a pretty early stage.

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[Lord Shipley]

My Lords, I found this a very helpful debate and conclude that if not now at some point soon the Minister will have to define words. The noble Baroness, Lady Cumberlege, drew our attention to an important issue around the definition of the word “modification”. When I read the Bill for the first time, I assumed that it would be really very minor in practice. However, it may not be and I am not sure that we can wait until a month after the coming into force of Part 1 for that word to be defined. It is material to what is in the Bill.

Clause 3(2) states:

“After subsection (4) insert … A local planning authority may at any time by order modify a neighbourhood development order they have made if they consider that the modification does not materially affect any planning permission granted by the order”.


The word “materially” starts to become very important. What is the difference between affecting and materially affecting a planning permission? We need to get this sorted out so that we understand it, otherwise we will end up with a modification which I thought was minor actually having the potential to be much more substantial, as the noble Baroness, Lady Cumberlege, pointed out. In addition, I should like to be clearer about what a material effect would be on a planning permission granted by the order. I want to understand that before we reach the Report stage. However, the debate as a whole has been extremely useful.

[Lord Beecham]

My Lords, I declared my interest earlier as a vice-president of the Local Government Association, as I suspect are half of the Members present in this Committee, and as a member of Newcastle City Council, where 20 years ago I was for a couple of years the chairman of the planning committee. But I have to say that I defer absolutely to the noble Lord, Lord Taylor of Goss Moor, whose expertise is much more current than mine and, I would guess, more profound as well.

I want to raise just a couple of points. The noble Lord, Lord Greaves, referred to the provisions set out in Amendment 6 amending Schedule 1 to the Town and Country Planning Act 1990 by inserting new sub-paragraph (1B). I have a slightly different point to make. The provision states:

“The local planning authority must notify the neighbourhood forum of”,


a variety of matters. What I do not know is the extent to which a neighbourhood forum is under an obligation to notify residents about these matters. In an ordinary planning application, the usual practice is for the planning authority to notify the residents in an area within a reasonable range of a projected application of its existence. The assumption here seems to be that the neighbourhood forum itself constitutes the community for these purposes. While it may have a representative role, that does not imply that every resident will get to know of matters which would have been raised by the local authority with the neighbourhood forum. Perhaps, if not today then later, the noble Lord could indicate whether I am right in my assumption that the provisions of this new clause are meant simply to notify the neighbourhood forum and whether there is any further obligation on the neighbourhood forum or anyone else to notify residents and other people with an interest.

I turn briefly to the point made by the noble Baroness, Lady Parminter, about the remedy if things do not go well. Given that there is a statutory responsibility here if it is not carried out, I would have thought that the remedy is that of judicial review. That is not an inexpensive process, I am afraid, but I suspect that if there has been an omission in complying with the requirements of the legislation, it is the remedy available to those who have a grievance. Again, possibly after taking advice from those behind him, I hope that the noble Lord will clarify the position.

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[Baroness Cumberlege]

My Lords, I turn to Schedule 1, which has been amended to include new Schedule A2. I have tabled a number of amendments on this. I shall discuss my Amendments 9, 10 and 11 before I discuss my Amendments 6A and 6B in this group.

I am very worried about sub-paragraphs (1) and (2) of paragraph 12 on page 38 of the Bill. They ensure that the examiner can sit in his office, away from the world he is examining, and immerse himself in documents and papers which give him little sense of place, neighbourhood and geography and, above all, the people who live and work there. These people cherish and care about their community, look after it and make it a dynamic place. They run myriad organisations. They understand what works in their area and what does not. As has been said, this is not a charter for nimbyism; on the contrary, it has stimulated housing and other development.

My amendments seek to give makers of neighbourhood plans a voice and a right to be heard and to enable them to explain face-to-face what makes the plan worthy of their community, and what they seek to achieve in strengthening it. Christopher Lockhart-Mummery QC of Landmark Chambers says that,

“any significant Neighbourhood Plan really requires a hearing”.

In my view, the Government’s steer in discouraging hearings is too strong. So much is dependent on what the examiner is minded to recommend through written representations. We need to be sure that the policies are not fundamentally altered without the plan-making body having the right to explain its objectives at a hearing, and the examiner suggesting better words to them to achieve their goals. After years of work producing a plan—in some cases this lasts up to five years; in my area, it was two and a half years—and then getting it agreed at referendum, the parish or town councils are at the mercy of the examiner. They can only watch while further representations and views of the local planning authority are gathered together and put to the examiner. It is not an inclusive process, and I think it should be.

My Amendment 6A is more specific. It concerns the situation where the examiner deletes a policy relating to a specific site or sites in favour of a commercial or economic development. As a nation, we need more sites for housing. Where a community has researched and identified its needs and proposed a significant development in terms supported by the landowner and the developer, is it right for the examiner to simply delete the proposed policy on the grounds that some of the wording of the policy is not clear? Should he not make every effort to help the community get its words right?

Amendment 6A would put a greater responsibility on an examiner who finds that a plan policy falls short of meeting the basic conditions. Instead of recommending the deletion of such policies and therefore denying us the housing sites we need, the examiner would be required to hold a hearing when he proposes to delete, add or significantly amend any draft policy that makes provision for a specific development, which would include housing development on a site identified in the plan. It would be a specific requirement.

Amendment 6B is also concerned with the examiner. Plan makers are at the mercy of others and can only watch while further representations and views of the local planning authority are gathered together and put to the appointed examiner. There is no recourse if the parish or town council is not satisfied with the work of the examiner. Examples might be because the examiner has recommended modifications that they do not believe are soundly based on evidence, or because the examiner has recommended deleting policies that could readily be remedied by a less dramatic modification. The amendment is designed to provide the makers of a plan with the right to a say in the action to be taken after the examination. It would achieve this by requiring the examiner to deliver a draft report for consideration by the local planning authority and the plan makers. Before finalising the report, the examiner should take into account and consider any points made by those bodies.

There have been suggestions—I suspect my noble friend might also make them—that this would further complicate the process or cause more delays in the planning system. I understand that some examiners already proceed in this way, but do so informally. The amendment is a modest way of ensuring a continuing engagement with the plan makers in the final stages of creating their own plan. Ideally, examiners should not recommend fundamental changes or deletions without first engaging the town or parish council in a hearing to understand the goals, and then fine-tuning the recommended changes.

This is a probing amendment and a way of attracting the attention of my noble friend in order to open a dialogue and discussion about how we can ensure that the confidence and faith of local plan makers is enhanced and does not deteriorate. I look forward to my noble friend thinking about the way we can ensure that that happens and I look forward to his response. I beg to move.

[Lord Beecham]

May I ask the noble Baroness, in reference to Amendment 6B, about the time limit that she has included in the amendment? We know that local authority planning departments are under great pressure, and in those circumstances, 28 days seems a little tight for the local planning authority to consider,

“new evidence, new facts or a different view”.

Is she prepared to be flexible about the period for the response because it seems too short?

[Baroness Cumberlege]

My Lords, I accept the suggestion but my concern is that these things can drag on and on, and unless one has a cut-off time, I fear that while the issues continue to be talked about and worked on, nothing actually happens. I am quite anxious to have a deadline and times within which people have to deliver their responses.

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Moved by

[Lord Beecham]

12: Clause 5, page 5, line 9, at end insert—
“with reasonable payments made by local authorities for the purposes set out in paragraphs (a) and (b) to be recovered from the Secretary of State.”

[Lord Beecham]

My Lords, Amendment 12, in my name and that of my noble friend Lord Kennedy, relates to Clause 5, which is headed, “Assistance in connection with neighbourhood planning”. We have heard a good deal about the need to support local communities in developing their local plans and seeing them implemented. The amendment seeks to ensure that they have the wherewithal to do that.

Clause 5 is the Government’s initiative to ensure that support is given. It prescribes that as part of the process:

“A statement of community involvement must set out the local planning authority’s policies for giving advice or assistance”,


for the making or modification—a word that has been much used this afternoon—of neighbourhood development orders and neighbourhood development plans. Of course, this is a matter which requires considerable experience and skill. The assumption, therefore, is that the local authority will provide the resources for the local community to obtain advice and support in going through the process.

I suppose in one sense this could be regarded as a new burden and therefore should or could fall into the general position that is purported to apply to the imposition of new burdens; namely, that if it is a requirement of legislation, the Government will ensure that local authorities’ costs in meeting that obligation are met. But in my experience it is as well to be explicit about this and that is the purpose of the proposed new clause, which would require the full recovery of costs in connection with the development of a neighbourhood plan. The local authority would support the community in its commissioning of works but the cost ultimately would be met by the Government.

Given the tenuous position within local authority planning departments, of which we have heard much in the Chamber and today, it is imperative that the matter be adequately resourced. As we have heard so many times, planning departments are under huge pressure. As the noble Baroness pointed out, they have lost staff to private concerns. It is difficult to recruit and retain staff. In some ways happily, the volume of work is growing, which we want to see. The Government have now come round to conceding, particularly on the housing front but also in other areas, that considerably more investment and building need to take place. In the context of that shortage of staff, it is particularly important given the competing pressures on departments that communities should be assisted in securing whatever help they need in the process. I hope therefore that the Minister will concede that this is right way forward if we are going to have properly developed neighbourhood plans with local communities fully engaged and equipped to make a contribution to the ultimate decisions, which without that professional support would not take place. I beg to move.

[Baroness Cumberlege]

My Lords, this is my swansong; this is the last time that your Lordships have to endure me. I have an amendment coupled with this one, but I say to the noble Lord, Lord Beecham, that I so agree with him. It is really important that we do not try—to use an expression appropriate for a planning Bill—to make bricks without straw, because it does not work; we need resourcing.

My amendment is a little different, being about the community infrastructure levy, which it would increase. It is a probing amendment, but if it is intended to continue the direction of travel towards localism and the greater empowerment of parish and town councils, we have not only to find some financial incentives for communities to accept development—although many of them do at the moment—but to encourage planning permissions for the building of houses. That was a significant feature of the coalition Government’s housing and planning reforms and a source of funding to principal councils.

One such initiative was the community infrastructure levy, which came into force in April 2010. It allows principal councils to raise funds from developers undertaking new building projects in their area and to fund a wide range of infrastructure needed as a result of the development. The community infrastructure levy-charging authorities are required to transfer to the parish or town councils 15% of the levy receipts arising from development that takes place in their area, rising to 25% for areas with an adopted neighbourhood plan.

Unfortunately, research suggests that local councils have been passed only 1% of the community levy receipts—just £92,000 despite principal councils collecting more than £9 million between April 2013 and June 2014. That is largely because it is not mandatory for principal councils to have a community infrastructure levy scheme in place and it has the effect of communities accepting development but not benefiting from the share of the levy to invest in local infrastructure needs and priorities.

It is vital that communities which are pro-growth benefit financially from policy incentives such as the community levy so as to invest in locally identified infrastructure needs and other community priorities. The first part of my amendment would address this issue by requiring local planning authorities to introduce the community infrastructure levy within 12 months of the day on which this Act is passed. I am sure my noble friend the Minister has more recent and up-to-date information about how this policy is being delivered, so I look forward to his response.

Paragraph (b) of my amendment is simply intended to increase the incentive for communities to embark on the development of a neighbourhood plan. At present, areas with an adopted neighbourhood plan are entitled to 25% of the levy. However, it does not happen everywhere. I should like to see neighbourhood planning grow, and for more communities to get involved and take a positive approach to future development in their area. To accelerate the uptake, I think a further range of measures is needed to build on efforts to date and, in particular, to ensure that communities benefit financially from development. Increasing the amount of the community infrastructure levy would provide an enhanced incentive. It would also have the added benefit of relieving some of the pressure on the parish precept as the principal means of income to invest in local projects, assets and infrastructure. I am sure my noble friend has other ideas as to how some of this could be achieved. This is a probing amendment and something that I think is worthy of discussion.

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[Lord Bourne of Aberystwyth]

My Lords, I thank all noble Lords who have participated in the debate on these amendments. I turn first to Amendment 12 tabled in the names of the noble Lords, Lord Kennedy and Lord Beecham. I understand the desire to ensure that adequate funding is available for local planning authorities.

I hope that I can reassure the noble Lord, Lord Beecham, that the Government’s rigorous new burdens doctrine ensures that local planning authorities receive the relevant resources to meet their statutory obligations under the neighbourhood planning process. Since 2012, more than £13 million has been paid out by the department to enable local planning authorities to meet their neighbourhood planning responsibilities. Some 104 different local planning authorities have submitted claims for the current financial year, and under the current arrangements where applicable, these authorities could have claimed £5,000 for each of the first five neighbourhood areas and the first five neighbourhood forums that they designate. For those authorities where a referendum date was set, they could also claim a further £20,000 to cover the costs of an examination for each referendum.

Evidence compiled by my department in August 2015 found that the current funding arrangements adequately cover the neighbourhood planning costs for the majority of local planning authorities. I appreciate that that is almost 18 months ago but I would be happy to share this evidence with noble Lords and I will ensure that it is sent on to those who have participated in the debate. We continue to review the level of funding available to local planning authorities and I can confirm that funding will continue to be available for the next financial year. Further details will be announced shortly, ahead of the next financial year.

I now turn to Amendment 26 tabled by my noble friend Lady Cumberlege. I share her desire to support neighbourhood planning, and that is why we currently allocate a proportion of community infrastructure levy receipts to those areas with an adopted neighbourhood plan, as she correctly acknowledged. It is a local choice, as the noble Lord, Lord Greaves, pointed out, for areas to introduce the levy based on economic viability and infrastructure need, and of course that will vary from area to area. Take-up has increased by 144% since April 2015. The current number of authorities which have adopted the community infrastructure levy is 132, and a further 86 have taken substantive steps towards it, which totals 64% of local authorities. However, I emphasise that this is a local choice. There are clear benefits in many cases and it may be that we need to look at publicising those more widely, but of course it is not for everyone.

It is also important that local areas have a choice over how the money raised by the levy is spent. The 25% neighbourhood share already allocated for communities with neighbourhood plans provides a real opportunity for those areas to have a say over how the levy is spent in their area. Communities can also influence how the levy is used across their local authority through participating in the development of the local plan and the charging schedules which set out the local authority’s infrastructure priorities.

I thank the noble Baroness, Lady Scott, for her contribution more widely in relation to the community infrastructure levy and I am happy to agree to the meeting she has suggested in order to understand and consider some of the detailed concerns. That would be beneficial to me as well.

I turn now to the issue of how best to continue to incentivise communities, and I understand the wishes of my noble friend Lady Cumberlege in this area. The Prime Minister has made clear that this is a particular priority for the Government. An independent review of the community infrastructure levy has recently reported to my department. The review group considered a wide range of issues including the take-up of the levy and the use of the neighbourhood share. We are currently reviewing its recommendations and once again I will provide further information on exactly where we stand on that.

With the reassurance that the Government are already considering the recommendations and the need perhaps to publicise the benefits of the community infrastructure levy more widely by giving evidence of how communities can benefit from the development of their area, and continuing to review the level of funding available to local planning authorities—the White Paper will have something to say on that as well—I would ask the noble Lord, Lord Beecham, to withdraw his amendment.

[Lord Beecham]

My Lords, I am grateful to the Minister for his constructive response. I was rather taken with his notion that the Government have a rigorous policy towards meeting new burdens. I would have thought “rigor mortis” might be a more appropriate description of their performance in that area but he is clearly well intentioned and we hope to see some evidence of that as the legislation goes forward.

Significantly, the figures he quoted on the community infrastructure levy were quite alarming in many ways. From what he said, authorities are not necessarily taking full advantage of what is currently available. Has the Minister considered talking to the Local Government Association about that? This matter should be taken forward in that way. I will certainly ensure that the points he made today are heard. I hope that process can be tackled. It is for the noble Baroness to comment more specifically on that subject since she raised it but there seems to be an issue here. One way or another, the system does not seem to be working adequately, yet apparently the goodwill is there on the government side to ensure it does. Perhaps after the event we could look at ways to promote the use of what should be a helpful instrument for both local authorities and the communities they represent.

[Lord Greaves]

We have had this discussion on previous Bills. In my authority, for example, it is not through lack of willingness or knowledge of CIL that we do not impose it. It is simply that if we impose it, it will make particular brownfield sites even less viable. On brownfield sites, we have to subsidise housing development to get it going and apply a kind of negative CIL, paid for by the council. That is the only way to do it. There is a mismatch here between different parts of the country.

[Lord Beecham]

I am not suggesting that all local authorities are able or would wish to impose the levy, for the very reasons that the noble Lord has just given. The question is whether there are authorities that could do so without the kind of impact the noble Lord described on his authority but have not yet taken advantage of it. It is pointless to speculate on the nature of those authorities but I suspect that some district councils, for example, might not have the officer resource to deal with what ought to be something that would benefit them. That matter should be looked at by the Government and the LGA together. I beg leave to withdraw the amendment.

Amendment 12 withdrawn.

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Moved by

[Lord Beecham]

13: After Clause 5, insert the following new Clause—
“Approval of draft neighbourhood development plans by referendum
(1) Paragraph 14 of Schedule 4B to the Town and Country Planning Act 1990 (referendum) is amended as follows.(2) After sub-paragraph (2) insert—“(2A) The outcome of such a referendum shall only be valid if the turnout is equal to or greater than 40%.””

[Lord Beecham]

My Lords, this amendment is in my name and that of my noble friend Lord Kennedy. It deals with referendums. We now have some experience of referendums in this country—perhaps rather regrettably. Of course, the position in the local scene is that it is an issue which would test the degree of support for local initiatives of the kind that the Bill envisages. I do not know but perhaps the noble Lord is in a position to say what kind of turnout has been engendered in the referendums that have been held. I understand that they are not required to be held and there are other means of consultation. However, it seems important to secure and recognise a substantial degree of public support, as reflected through a reasonably pitched turnout.

Forty per cent does not seem excessive, but it would show a degree of engagement and interest on the part of the local community which ought to be recognised. I suggest that it would give an incentive to local communities and their authorities to debate issues very fully. I should have said that the amendment has the support of the Local Government Association, as did the previous one. In the circumstances, I hope the Minister will acknowledge that this measure would be an incentive to authorities and local groups to engage fully with their communities to ensure a turnout that adequately reflects public engagement with an important process. I beg to move.

[Lord Shipley]

My Lords, I do not support this amendment as it implies that a huge amount of work in developing a neighbourhood plan could be lost if 39.9% of the electorate turned out to vote on it. We have in this country a history of assuming that those who do not vote are abstaining. It seems to me that the current system works perfectly well. If some people—perhaps a majority of the electorate—decide not to vote, that is their right. It would be very wrong if all the work of a lot of people over a substantial period of time could be lost because an arbitrary figure of 40% was imposed. The noble Lord, Lord Beecham, has not justified that figure. I would remind him that a large number of local councillors would not have been elected to local government if a 40% turnout figure had been imposed. Indeed, I remind him that he himself in 2014 was elected in the Benwell and Scotswood ward of Newcastle upon Tyne with a turnout figure of 32.1%. However, I do not think that anybody in your Lordships’ Chamber would wish to say that that result was not valid. I hope that the noble Lord will think very carefully about proposing a requirement that there should be a 40% turnout of the electorate on a referendum relating to a neighbourhood plan.

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[Lord Bourne of Aberystwyth]

My Lords, I think we now know why the figure of 40% appears in the amendment.

In all seriousness, clearly we would all want to see higher turnouts, but regrettably much of our national life turns on low turnouts. In May 2016 the overall turnout in English local elections was 33.8%—the noble Lord, Lord Kennedy, bucked the trend. The average turnout for neighbourhood planning referendums is 32%. The principles of neighbourhood plan and neighbourhood development order referendums are consistent with all referendums and elections in our country. People are given the right to vote but are not obliged to do so. With this in mind, we cannot support the 40% threshold. The Electoral Commission’s data show that the overall turnout in English local elections since 2007 has exceeded 40% in only three years.

As the Minister for Housing and Planning, Gavin Barwell, highlighted in the other place when a similar amendment was tabled in Committee, of the approximately 240 neighbourhood planning referendums that had been held at that point, around 170 had had a turnout of less than 40%. The amendment would drive a coach and horses through the legislation and could jeopardise the whole neighbourhood planning process and the hard work of so many people and communities to produce neighbourhood plans, which the Government support. With this clarification, I hope the noble Lord will withdraw his amendment.

[Lord Beecham]

My Lords, it is interesting to be identified by the Liberal Democrats as having a low polling achievement, when at the general election, was it 8% or 9% that the party of the noble Lord, Lord Shipley, managed to achieve? However, to my mind the issue was not so much about a particular figure as about trying to ensure that there is significant involvement of local people in making a decision.

I did not know the statistics that the Minister referred to and I am grateful to him for answering my question about that. Those figures suggest that there is in many places a reasonably high demand—30% or so, whatever it might be, is a good response to something such as this. But the object ought to be to encourage as much as possible a turnout on these decisions. I am not wedded to the 40% figure. Perhaps a different approach might be to provide financial and other support to promote referendums, without necessarily imposing a limit, but to work with local authorities— again, perhaps with the LGA—to develop a scheme to maximise the involvement of local people in a system which is supposed to engage them in evolving policy which will affect their communities. Perhaps it could be looked at afresh from that perspective without identifying a particular figure, which I accept is very much an arbitrary one. But we are all concerned to see public engagement increasing as much as possible. There may be ways to do that.

In the circumstances, of course I beg leave to withdraw the amendment, and I hope that the turnout in the next elections in Newcastle will be somewhat higher.

Amendment 13 withdrawn.

Homelessness

Lord Beecham Excerpts

Tuesday 31st January 2017 Lords Chamber

Asked by

[Lord Beecham]

To ask Her Majesty’s Government what steps they plan to take, in addition to their support for the Private Member’s Homelessness Reduction Bill, to tackle the growing problems of homelessness and rough sleeping.

[Lord Beecham (Lab)]

My Lords, I refer to my local government interests. Rough sleeping has doubled since 2010—

[Noble Lords]

Oh!

[Lord Beecham]

I apologise to the House—I beg leave to ask the Question standing in my name on the Order Paper.

[The Parliamentary Under-Secretary of State, Department for Communities and Local Government and Wales Office (Lord Bourne of Aberystwyth) (Con)]

My Lords, I thank the noble Lord for the brief insight into the supplementary that he is about to ask, although unfortunately it was perhaps a little too brief. The inference in the Question on the Order Paper is absolutely right. The Private Member’s Bill introduced by my honourable friend Bob Blackman in the other place is of great importance. In addition, the Government are determined to help the most vulnerable in society and we are investing over £550 million up to 2020 to tackle homelessness and rough sleeping.

[Lord Beecham]

My Lords, as I was saying before I was properly corrected, rough sleeping has doubled since 2010, and the use of temporary accommodation by local councils has increased by 40%. The Government’s support for the Homelessness Reduction Bill is welcome, but their £61 million funding over three years leaves a gap of £79 million according to the Local Government Association. Is not the reality that the causes of homelessness are not being tackled? When will the Government take action to facilitate the building of affordable housing to rent and to tackle the problems caused by an unregulated private rented sector in which high rents and a lack of security of tenure have led to the present crisis?

[Lord Bourne of Aberystwyth]

My Lords, the question of homelessness and rough sleeping is a complex one. The noble Lord is right that the number of rough sleepers has gone up in the past six years—that is absolutely true—but the number of homeless people has halved since 2003, and more than halved since its peak. As I said, during this Parliament we have committed £550 million to tackling rough sleeping and homelessness over the next four years.

National Policy for the Built Environment

Lord Beecham Excerpts

Tuesday 24th January 2017 Grand Committee

[Lord Beecham (Lab)]

My Lords, I join others of your Lordships in congratulating the noble Baroness, Lady O’Cathain, on securing this debate on the Select Committee’s report just four weeks short of its first birthday. I also congratulate my noble friends Lady Whitaker and Lady Andrews, whose idea it was to establish the committee in the first place.

The report was launched during the passage into legislation of the controversial Housing and Planning Bill, much of the impact of which will rest on secondary legislation still to be concluded. If I have one reservation about the thorough and challenging analysis of the problems reflected in the report’s title, Building Better Places, it would be that some might be inclined to infer that the problem—and the report’s recommendations —relate to future development, whereas the issues it addresses are already with us.

The report lists five “F” characteristics by which the quality of local places should be defined, namely that they should be friendly, fair, flourishing, fun and free. It defines the last as being “safe, accessible and democratic”. I would list three more Fs, which are matters of a different kind that need to be addressed because they threaten those positive objectives—namely, flooding, fuel, and fracking.

All three of these issues pose challenges to local communities, self-evidently in relation to flooding, as to which there is still insufficient investment in flood prevention. I do not suppose the chair of the Local Government Association—I ought to refer to my interest therein—will have been telephoned by the Secretary of State, as I once was by my noble friend Lord Prescott when he was Deputy Prime Minister and Secretary of State for the Environment and York was suffering floods. He telephoned me from Downing Street to ask if I knew where to obtain sandbags.

Fuel emissions greatly threaten health. It is shameful and dangerous that in London they have apparently already exceeded what would have been a safe level for the whole year. There are also very real concerns over fracking, where the Government have effectively taken over from the relevant, democratically elected authorities the responsibility for deciding whether it will be permitted.

Any policy for the built environment needs to address these issues, though of course they are not wholly the responsibility of the Department for Communities and Local Government. The Government’s response to the report, which took nine months in the gestation, is, as others have mentioned, somewhat disappointing. It suffers from being a report from only the DCLG, it seems, whereas it should have been produced jointly with other departments, particularly those with responsibility for health, transport, business and culture, as well as what was the Department of Energy and Climate Change, the responsibilities of which have transferred into the business department.

The tone of the response is too often one of complacency. Given the Government’s failure to react to concerns raised by the committee—for example, relating to the permission in principle measure in the then Housing and Planning Bill—we should not be surprised. Of course, along with the formal response, we also have legislation in the form of the Neighbourhood Planning Bill and, as I have reminded the Committee, secondary legislation under the Housing and Planning Act, with the housing White Paper apparently imminent. I hope that it will reflect some of the concerns raised by the committee, notably around carbon emissions and energy efficiency for new and existing homes. The response to the committee report in these matters referred briefly to “looking at a range” of options in relation to the latter and,

“working with industry to carefully consider”—

their split infinitive, not mine—

“future policy options”,

which suggests a trip to the long grass. Has anything happened relating to this issue in the last year?

Rather feebly, on the committee’s suggestion that they should encourage local authorities to set minimum standards for green infrastructure and management in local plans and planning decisions to promote,

“wider recognition of the fact that Green Infrastructure is an asset, and offers wider economic, health and social benefits”,

the Government regard it as inappropriate,

“to specify minimum standards … as this is a matter for local discretion”.

Coming from a Government who have not hesitated to intrude on local discretion in matters ranging from fracking to the levels of council tax to the number of council newsletters that might be published, not to mention their call for weekly bin collections and their imposition of the bedroom tax and forced reduction of council rents, that is a pretty unconvincing argument.

What is much worse, however, is the cavalier dismissal of the report’s recommendations relating to the provision of what it describes as “long-term affordable rented housing”. Incredibly, in the midst of a housing crisis in which affordability is defined not by what people can afford after meeting their everyday living expenses, but by the arbitrary measure of 80% of the profit-making rents in the private rented sector, the Government refuse even,

“to review the impact of borrowing restrictions on local authorities’ ability to deliver housing”.

On the contrary, as the noble Lord, Lord Best, reminded us, and as we may already be aware, the increase in council rents that the Government are imposing will reduce councils’ capacity not only to build but even to maintain the existing housing stock.

The Government’s reply, amazingly, boasts about the building of all of 8,620 local authority dwellings in 2016. As I have mentioned in the Chamber more than once, Newcastle City Council alone built 3,000 homes in the year I was first elected to the council in 1967. Of course, there is huge pressure to build and no current willingness in the Government to encourage significant local authority building. I acknowledge, incidentally, that the last Labour Government did not build anything like enough new council houses, but they did at least invest heavily in maintaining and improving the existing council stock.

Unless I have missed it, the report does not deal with the role of the private rented sector at all, which includes some 35% of council homes acquired under right to buy and subsequently sold. Will the Minister tell us what, if any, work has been done to assess the condition of these properties, the rents that are charged and their impact on local communities, not least in terms of the rents being levied and the insecurity of tenure? The noble Lord, Lord Best, referred to the local housing allowance and the impact that that would have on housing provision and, indeed, homelessness. Certainly, in the ward that I represent in Newcastle, there are too many such properties that are badly managed such that they have a negative impact on the community. Is it too much to hope that the housing White Paper will address this issue and, in particular, make landlord licensing schemes easier to create than at present?

On a different front, the committee expressed concern about what it described as a significant challenge to our high streets. The Government’s response appears to be somewhat complacent, citing evidence that high streets are recovering from the impact of the global crash. But it is surely becoming clear that online shopping is growing rapidly, as Amazon and the like expand their operations, even looking to effect deliveries not just by underpaid, exploited, part-time workers, but by drones. Do the Government intend to examine the implications of these developments, not just for the high street but for those who work for the industry, whether as genuine employees or as zero-hours contractors or the like?

There are other issues which need to be addressed if we are to secure better places, whether in our existing cities, towns and villages or in new developments. One matter that the report does not significantly address, and has not been significantly addressed yet this evening, is the nature of housing construction that is going ahead. As many of us have pointed out repeatedly, the space standards of new housing in this country compare very unfavourably with those on the continent. That is a matter the Government ought to address. But there are also issues of public transport, which is a key problem in many areas, whether it takes the form of bus services or fragmented and, in many areas, dysfunctional rail networks. We also need to ensure that access to health provision, including pharmacies and recreation, is available, and that education, children’s play and the needs of an increasingly elderly population— I hardly need to declare my interest in that—are reflected in planned developments.

Many of these areas will be ones in which local councils will need to play an important role, but given the current and projected levels of cuts forced on local government by the coalition and the present Administration, already severely impacting on staffing and, as we have been reminded, particularly on planning departments and thereby the capacity of local government to deliver existing services, it really is difficult to see how the eminently sensible proposals of the committee, let alone those that I and other speakers raised, can reasonably be expected to be implemented. In future the Government need to respond to reports of this kind more quickly, thoroughly and effectively so we can see aspirations translated into the life of communities.

Immigration: Housing

Lord Beecham Excerpts

Thursday 19th January 2017 Lords Chamber

[Lord Bourne of Aberystwyth]

My Lords, no Question Time is complete without a question on allotments. I know my noble friend feels very strongly about this. Unfortunately, I am blindsided on the particular impact of this issue on allotments, but I will ensure that she has a detailed response and I shall copy it to the Library.

[Lord Beecham (Lab)]

My Lords, will the Government review the contracts with organisations such as G4S relating to the housing of asylum seekers and refugees? Under the Labour Government, those contracts required more than simply housing; they required an element of support for the tenants of those organisations. That changed under the coalition Government, and that is now imposing considerable pressures on local authorities and communities because there is not that visible support which formerly existed under previous contracts.

[Lord Bourne of Aberystwyth]

My Lords, the noble Lord raises an important issue in relation to asylum seekers and housing and services for them. I have experienced this in going around the country and visiting particular communities. I will write to the noble Lord, if I may, on the particular point about G4S, and again I will ensure that that is copied to the Library.

Housing: Lettings Fees

Lord Beecham Excerpts

Thursday 19th January 2017 Lords Chamber

[Lord Bourne of Aberystwyth]

My Lords, first, I pay tribute to the work that the noble Baroness does on this matter. With her background in Shelter, she certainly knows what she is talking about. It is important that we have detailed consultation. I am sure that she will be pleased to hear that officials were in Scotland yesterday to learn lessons from there. I have sympathy with a wide-ranging ban on fees, although we have to be careful to ensure that we get it right through the consultation. For example, if somebody loses their key, it is legitimate that they should pay the letting agent for getting a new one. But I agree with the general thrust of what she says.

[Lord Beecham (Lab)]

My Lords, will the Minister look at some other issues affecting the private rented sector: soaring rents, a rising tide of evictions, and a great lack of security because tenancies can be terminated legally after a very short period? Is that not a matter that the Government should address?

Business Rates: High Street Retailers

Lord Beecham Excerpts

Tuesday 17th January 2017 Lords Chamber

[Lord Bourne of Aberystwyth]

My Lords, as I have indicated, most businesses will see a fall in their business rates. Those subject to increases will find that of course they will be phased in over time, to take just one area which my noble friend touched upon. That will pay for those seeing a reduction, which will also be phased in over time, as is required by law under the Local Government Finance Act 1988.

[Lord Beecham (Lab)]

My Lords, given that local government will be increasingly dependent on business rates, instead of being funded through rate revenue support grant, what steps will the Government take to mitigate the effect of the differences of yield in business rates between authorities with high-yielding properties—for example, in London and elsewhere—as opposed to those with low rates in the north-east, for example, or in other parts of the country?

[Lord Bourne of Aberystwyth]

My Lords, the noble Lord is quite right that there needs to be a mechanism to correct that. He is probably aware that we have introduced a Local Government Finance Bill in the other place, where no doubt such matters will be discussed at greater length.

Neighbourhood Planning Bill

Lord Beecham Excerpts

2nd reading (Hansard): House of Lords
Tuesday 17th January 2017 Lords Chamber

[Lord Beecham (Lab)]

My Lords, I refer to my interests as yet another vice-president of the Local Government Association and as a member of Newcastle City Council. When I was first elected to the council in 1967, it was building 3,000 council houses in that year. Very few councils can claim to have done anything like that for the last 20 years. I dissent very strongly from the critique made by the noble Lord, Lord Borwick, who blamed local authorities for the failure to build. As we have heard, hundreds of thousands of granted planning applications have not been implemented, and successive Governments, I regret to say, have failed to support the provision of social housing, particularly by local authorities.

In any event, we are 10 days short of the anniversary of the Second Reading of the Housing and Planning Act, the legislative masterpiece which, during the three and a half months it was before this House, prompted a Conservative Back-Bench Peer to congratulate me on retaining my sanity “notwithstanding this terrible, terrible, Bill”. I do not propose to test the opinion of the House on that matter. However, it is clear that the Act has caused more problems than it has resolved. It is now eight months since Royal Assent and much of the secondary legislation still has to be tabled. Indeed, it was striking that, during the passage of the Bill, the matters that were to be subject to secondary legislation had not been consulted upon—and we have yet to see the results of consultation, let alone a good deal of the secondary legislation that will be required to implement what is now the Act.

Now, of course, we have this Bill, and a White Paper on housing is apparently imminent. It is not clear to me whether the White Paper is intended to lead to legislation. I assume that it will. Perhaps the noble Lord can inform us with a bit more precision—perhaps he cannot—when we are likely to receive the White Paper. Presumably if it leads to legislation, that will be something for the next Session.

This history discloses a system of policy-making and legislation on the hoof and in reverse order—reflecting, frankly, breath-taking levels of incompetence and an abysmal failure by the Government to tackle the housing crisis afflicting families and communities all over England. As the noble Lord, Lord Porter, pointed out, this Bill will not solve the housing problem, although maybe the next one will. I suppose that we should be grateful for one thing that is not in the Bill, to which my noble friend referred—the controversial plan to privatise the Land Registry. I am not entirely clear whether that has been laid to rest for good and all or whether it is in suspension. Perhaps the Minister could clarify that situation.

Those parts of the Bill which reflect its title seem, for the most part, to be relatively innocuous as far as they go, but I wonder whether the Minister could enlighten us on the turnout levels in local referendums that have been held and whether a minimum threshold is contemplated.

I have some concern, clearly shared by the noble Earl, Lord Lytton, that in some areas residents might be tempted to use a neighbourhood plan as a means of preventing development that might benefit people who, for example, are in need of housing but are not resident in the immediate area. I recall, painfully, an encounter with a lady in Newcastle in a house built not so long ago on a greenfield site near the edge of the city who was adamant that no social housing should be built on the green fields that she herself was now overlooking. I hope that that nimbyism will not feature as the Government’s plans for new housing, if that is what they amount to, come forward. As the noble Lord, Lord Cameron, pointed out, local communities need support in addressing the process of local planning, with or without referendums. Again, I hope that the Minister can indicate whether the Government are prepared to back their aspirations with some resourcing.

The LGA rightly draws attention to the need to avoid undermining the ability of a planning authority to,

“meet the wider strategic objectives set out in an emerging or adopted Local Plan, by unintentionally giving greater weight to the status of neighbourhood plans than to Local Plans”.

There is a balance to be struck here. The neighbourhood plan should be seen as part of the local plan and not as something in conflict with it. The association seeks an assurance that the new requirements in relation to the planning register will be funded. Will the Minister confirm that the new burdens doctrine will apply, given the extreme pressure on council planning staff levels which already exists and which has been referred to in this debate?

Although it welcomes the Bill’s provisions in relation to compulsory purchase, the LGA calls for greater powers where permissions have expired without development commencing, the delegation of confirmation of a CPO to the relevant authority and a fundamental consolidation of compulsory purchase legislation. Perhaps the Minister could indicate the Government’s stance in respect of those three calls by the LGA.

The LGA also asks for planning fees to meet the full costs of the service—a matter to which several noble Lords referred. It is a principle which the Government have been quick to apply in relation to court and tribunal fees—as I have cause to comment on from time to time in one of my other capacities here—and which, perhaps surprisingly but as the noble Baroness, Lady Maddock, confirmed, has the backing of two-thirds of the members of the British Property Federation who responded to a survey on the issue. Staffing is certainly a highly relevant point. Again, the noble Lord, Lord Cameron, referred to this and pointed out that it was critically responsible for the delay in decision-making. It will not be solved without additional resources going into the planning service.

Incidentally, the LGA also stresses the need to have regard to the fact that any strengthening of the role of neighbourhood plans in determining applications should come hand in hand with the strengthening of assurances that neighbourhood plans will conform with both existing planning law and evidence regarding local circumstances, housing need and land supply. Again, it would be helpful if the Minister could confirm that tonight—or it may be that it will feature in the forthcoming White Paper. I must say that I reject the very negative portrayal by the noble Baroness, Lady Finn, of the role of local government of any colour in the planning process, and in particular of its desire to deal with the housing position.

As we have heard, the Bill is very light on the provision of social and affordable housing, on tenure and on the required infrastructure that makes for viable communities, with schools, open space, parks, shops and GPs’ surgeries obviously proportionate to the scale of development—the kinds of issues that the noble Baronesses, Lady Cumberlege and Lady Greengross, addressed in their contributions.

The major concern that many of us have about the Bill is, as Members will recall from the debate, the provision for pre-commencement planning conditions. Under the Bill’s provisions, these would apply only with the written agreement of the developer. In the absence of agreement, the authority would be left with the choice of refusing permission, which would presumably mean that the developer could appeal. I certainly share the reservations and criticisms of the provision made by the noble Baroness, Lady Parminter.

Worryingly, moreover, the Bill allows the Secretary of State to make regulations stating what conditions may or may not be imposed. Once again, we are being driven into the territory of secondary legislation if the Government have it in mind to take that power. I hope that the Minister will confirm that we will see draft regulations before the Bill reaches Third Reading.

The Government’s consultation on this proposal ended in November. When might we expect to see the Government’s response and, if they intend to proceed with this controversial intervention in local decision-making, can the Minister assure us that draft regulations will be published?

It is striking that the Local Government Association’s housing spokesman, Councillor Martin Tett, the leader of Buckinghamshire County Council—and not, so far as I am aware, a paid-up member of the Labour Party—expressed surprise that there is,

“no mention of the National Infrastructure Commission”,

which had been promised in the Queen’s Speech. Meanwhile, the House Builders Association—again, a body not affiliated to the Labour Party—referred to the omission of infrastructure as leading to increasing uncertainty in local communities about the impact of development.

Incidentally, the House Builders Association also drew attention to the problems caused by the reduction in planning staff as a result of cuts since 2010 and the likelihood of a consequent slowing down of the process caused by new statutory duties. If the Government are not overly inclined to listen to an Opposition spokesman making these points, perhaps they should pay a measure of attention to a Conservative local government representative and the House Builders Association, which is obviously very involved with the whole process.

The Bill creates the opportunity to raise a number of issues of a controversial nature where planning law could make a difference. We have heard about some of those today, including the conversion of shops to housing and energy efficiency—which, as the noble Lord, Lord Cameron, pointed out, needs revisiting. We also heard about flood prevention, the protection of wildlife and the protection of pubs and local amenities. These matters were raised by my noble friend Lady Young, and the noble Lord, Lord Renfrew, spoke about protecting our heritage. We look forward to constructive discussions on these and other matters during the Bill’s progress through the House. I hope that we can reach consensus on controversial matters and, in particular, see a connection between the Government’s policy as it emerges in the White Paper and this Bill, in order that we can tackle what is a major national crisis.

Greater Manchester Combined Authority (Functions and Amendment) Order 2016

Lord Beecham Excerpts

Wednesday 21st December 2016 Lords Chamber

[The Parliamentary Under-Secretary of State, Department for Communities and Local Government and Wales Office (Lord Bourne of Aberystwyth) (Con)]

My Lords, the draft order which we are considering, if approved and made, will provide Greater Manchester with new, devolved powers on: planning, land acquisition and housing; transport; education and skills; and cultural events and entertainment. It also provides for constitutional and funding arrangements.

The Government have, of course, already made significant progress in delivering their manifesto commitment to implement the historic devolution deal with Greater Manchester. Since the first devolution deal with Greater Manchester was agreed in November 2014 we have passed the Cities and Local Government Devolution Act 2016, which provides new powers for the Secretary of State, by order, to devolve to a combined authority a Secretary of State function and confer on a combined authority any function of a public authority. The 2016 Act also enables there to be strengthened accountability and governance for combined authorities, through enhanced overview and scrutiny arrangements and through new powers to establish, by order, the position of elected mayor.

In March 2015 we legislated to enable Greater Manchester to appoint an interim mayor, who is helping to provide additional leadership capacity and prepare for the further devolution of powers. Noble Lords will recall that in March this year we passed legislation to establish the position of elected mayor for Greater Manchester. The mayor will be elected in May 2017 and will also take on the role of the police and crime commissioner, with the separate elected position of PCC being abolished.

In the order we are considering today, we are for the first time conferring significant new powers on Greater Manchester. Some of these new functions are to be undertaken by the mayor individually and others will be undertaken jointly by the members of the combined authority. This is the first time that we are using the powers Parliament gave us in the Cities and Local Government Devolution Act 2016 to devolve Secretary of State and other public authority functions, and it will not be the last such order. More draft orders are already being developed to confer powers on Greater Manchester for planning, transport, policing and other issues. Implementation of the four devolution agreements made with Greater Manchester is truly under way.

For Greater Manchester, these agreements are a natural continuation of the devolution journey. Councils in Greater Manchester have been working closely together for decades, and through the combined authority established in 2011, Greater Manchester authorities have been working together formally on the interconnected issues of transport, economic development and regeneration. It was with Greater Manchester that the Government made the first devolution agreement in November 2014. The four deals now agreed between the Government and Greater Manchester mean that it will receive: a devolved transport budget and transport powers to help provide a more modern, better-connected network; new planning and housing powers, with a £300 million housing investment fund to provide up to 15,000 new homes over 10 years; new functions over skills and education, funding, incentives and support to get up to 50,000 people back into work; and an infrastructure fund of £30 million a year for 30 years.

Noble Lords will want to know that the statutory origin of the draft order before us today is in the governance review and scheme prepared by Greater Manchester in accordance with the requirement in the Local Democracy, Economic Development and Construction Act 2009. Greater Manchester published this scheme in March this year and, as provided for by the 2009 Act, the combined authority consulted on proposals in the scheme.

The combined authority ran the consultation from March 2016 to May 2016, in conjunction with the 10 local authorities. The consultation was primarily conducted digitally, including promotion through social media. In addition, of course, respondents were able to provide responses on paper, and posters and consultation leaflets were available in prime locations across Greater Manchester. As statute also requires, the combined authority provided to the Secretary of State in June a summary of the responses to the consultation.

Before laying this draft order before Parliament, the Secretary of State has considered the statutory requirements in the 2009 Act. The Secretary of State considers that conferring these functions on the Greater Manchester Combined Authority would be likely to lead to an improvement in the exercise of the statutory functions, and, in considering it appropriate to confer local authority powers on the combined authority and to make constitutional changes, the Secretary of State has had regard to the impact on local government and communities, as he is required to do. Also as required by statute, the 10 constituent councils and the combined authority have consented to the making of this order. As required by the 2016 Act, we have, in parallel with this order, laid a report before Parliament which sets out the details of the public authority powers we are conferring on Greater Manchester through this order. Noble Lords may recall that the requirement for this report was one of the additions that this House made to the 2016 Act during its passage.

This draft order now gives effect to many of the proposals in Greater Manchester’s March scheme. If approved and made, it will place a duty on the mayor to prepare a Greater Manchester spatial development strategy, enabling an integrated approach to spatial planning in the same way as in London. Councils will continue to prepare local plans and will remain responsible for local planning decisions. It will confer land acquisition, disposal and housing powers, including a compulsory purchase power for the mayor—the same powers as those held by the Homes and Communities Agency and councils. No powers are being taken away from councils. These powers will enable Greater Manchester to take a strategic approach to driving development and regeneration and stimulating economic growth, support effective use of the £300 million devolved budget and deliver up to 15,000 new homes.

The order will build on Greater Manchester’s current transport function, recognising that efficient transport is fundamental to securing economic, social and environmental objectives. The order provides powers on road safety promotion, road improvement and maintenance and for the mayor to pay grants to bus operators ahead of bus franchising as envisaged in the Bus Services Bill. It will confer new powers to reshape and restructure skills provision and support Greater Manchester to support young people to participate in education and training and to tackle its most important labour market challenge, which is youth unemployment. It will promote cultural events and entertainment and provide for constitutional and funding arrangements.

In conclusion, the Government are making great progress in implementing devolution to Greater Manchester. The draft order we are considering today is a further significant milestone that will contribute to greater prosperity in Greater Manchester and will open the door to a more balanced economy and economic success across Greater Manchester, the northern powerhouse and the country. I commend this draft order to the House.

[Lord Beecham (Lab)]

My Lords, the Minister is right to say that the Government are devolving significant new powers to Greater Manchester and perhaps to some other authorities as the process rolls forward. However, what they are not doing is accompanying the devolution of powers with anything like sufficient additional resources. The 10 local authorities in Greater Manchester will receive £30 million a year for 30 years for infrastructure projects. That is £900 million over 30 years. At the moment, these councils have suffered a loss of £1.7 billion a year in respect of their budgets. That is likely to rise to £2 billion a year across the Greater Manchester area by 2020. Far from meeting the needs of these authorities, £900 million over 30 years is really a flea bite in comparison with what those councils are having to contend with in terms of providing services.

Non-Domestic Rating (Chargeable Amounts) (England) Regulations 2016

Lord Beecham Excerpts

Wednesday 21st December 2016 Lords Chamber

[The Parliamentary Under-Secretary of State, Department for Communities and Local Government and Wales Office (Lord Bourne of Aberystwyth) (Con)]

My Lords, these regulations provide the mechanism to introduce the transitional relief scheme for the business rates revaluation that takes effect in April 2017. This will help almost 600,000 businesses with £3.6 billion of relief over the next five years.

Business rates are a property tax where the amount paid depends upon the rateable value of the property. That rateable value broadly represents the annual rental value and is assessed independently of Ministers by the Valuation Office Agency. To maintain fairness in the system, those rateable values are updated for changes in the property market at regular revaluations. The next revaluation takes effect from 1 April 2017.

We estimate that more than seven out of 10 ratepayers will see their rates bill either fall or stay the same at the 2017 revaluation, and eight out of nine regions will see bills fall overall. However, for those facing increases we are putting in place a transitional relief scheme, which the regulations we are discussing today implement. They will be used by local government to establish whether ratepayers should receive transitional relief limiting the annual increase to their bills. They will also be used to establish whether ratepayers should contribute to the cost of that relief by capping the annual reduction in their bill due to the revaluation.

By necessity, the regulations are complex. They deal with the various cases on how to calculate the bill where a property changes through a split, merger, extension or renovation of a property. My department produced a detailed Explanatory Memorandum to accompany the regulations which explains how each provision works. I do not propose to cover all these rules, but the main principles are important and worth explaining.

The transitional relief scheme we adopted provides the same level of relief for small and medium businesses as was provided at the previous revaluation in 2010. In particular, no small property will see more than a 5% increase next year before inflation due to the revaluation. This benefits 500,000 small businesses. Overall, the transitional relief scheme is worth £3.6 billion over the five years of the scheme. Some of the biggest increases are being faced by large businesses in London, so the scheme targets over £1 billion of support to London alone.

We are required by law to ensure that the transitional relief scheme is self-financing. To satisfy this legal requirement, we have to meet the cost of the relief from other ratepayers. The scheme we have adopted targets that funding on those ratepayers who benefit the most from the revaluation by capping annual reductions in bills. This is the same approach as has been adopted since 1990. It means that those benefiting the most from the revaluation contribute to the cost of the transitional relief, while still seeing their bills fall.

The scheme has been developed by my department using actual data on the revaluation provided by the Valuation Office Agency. We consulted on our preferred scheme in September and received support from, among others, the Federation of Small Businesses, the Association of Convenience Stores and the British Beer & Pub Association. The regulations have been shared and discussed in draft with local authorities and their software providers. They are very similar to previous transitional relief schemes and the transitional relief will be applied automatically to rate bills from 1 April 2017.

Finally, I assure the House that the revaluation and the transitional relief scheme will not affect local authority incomes. As many will know, since 2013 the Government have allowed local authorities to retain 50% of the business rates they collect, and by the end of this Parliament we will increase that to 100%. When we introduced the 50% rates retention scheme, we signalled that following a revaluation we would make adjustments to the rates retention scheme to ensure that, as far as is practicable, the business rates kept by local authorities were unaffected by the revaluation. This commitment will ensure that the growth incentive created by the rates retention scheme and the delivery of public services will not be weakened by any losses of income from the 2017 revaluation or the operation of the transitional relief scheme. Last week, my department published the draft local government finance settlement, which included the adjustments necessary to deliver on this commitment. I commend the regulations to the House.

[Lord Beecham (Lab)]

My Lords, it is no doubt timely to review the valuation of properties for the purposes of business rates. My recollection is that it is now 25 years since the valuation for council tax purposes was applied. Consequently, we still have the same number of bands and the same financial layout that was established all that time ago. If it is timely to revalue properties for the purposes of business rates, why is it not timely to review the basis of council tax and change the valuations there—and, indeed, possibly the number of bands?

[Lord Shipley (LD)]

My Lords, in the context of the existing system, the proposal that the Minister and the department have come up with is the right response. The amended version of option 2, which the documentation explains, is probably the right thing to introduce.

However, there is a lot of concern about the context of this and the impact of the revaluation. I was surprised to read in paragraph 10.3 of the Explanatory Memorandum:

“An impact assessment has not been produced for this instrument because it amends an existing local tax regime. Publication of a full impact assessment is not necessary for such legislation”.

I understand the overall reason for that but I suspect that the department is going to get many more appeals because of the significance of the changes, which, over the next few years, will cause some, who have very high increases in their bills, to wonder whether they could secure a reduction through the appeals system. We heard at Questions earlier about the impact of that on local authorities’ ability to plan their annual budgeting. I would appreciate anything that the Minister can say about how the Government might help to speed up the business rate appeals system.

Business Rates: Devolution

Lord Beecham Excerpts

Wednesday 21st December 2016 Lords Chamber

[Lord Bourne of Aberystwyth]

My Lords, the noble Baroness is right that there is discussion on attendance allowance being devolved, although no conclusion has been reached on that. We are currently considering responses on that. I do not think we have had a response from Watford in general terms on the reforms we are suggesting.

[Lord Beecham (Lab)]

My Lords, will the Government, in the course of changing the new system, allow local authorities to vary the business rate, or will the level of business rates still be determined at national level and merely the receipts be localised? Further, what steps will the Government take to redress the imbalances that will arise from some areas having significantly higher potential yield from business rates than others?

[Lord Bourne of Aberystwyth]

My Lords, as I indicated, we are consulting on this and we will discuss it with local government as the reforms come forward. On the general point on redistribution, that has to be an element of this. The noble Lord is quite right that some local authorities will be in receipt of far more in business rates than others. We will need a corrective mechanism to deal with that.