Public Transport in Towns and Cities
Lord Best Excerpts(1 year, 8 months ago)
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Lord Best (CB)
My Lords, as a member of the Built Environment Committee, I pay tribute to our clerks; to our previous chair, the noble Baroness, Lady Neville-Rolfe, for her leadership; and to the current chair, the noble Lord, Lord Moylan, for his stimulating overview of our report today. Like so many Select Committee outputs from your Lordships’ House, this report presents a cross-party, balanced, evidence-based case for sensible changes to current government policy.
I draw attention to the last of our committee’s five key recommendations. The noble Lord, Lord Shipley, also drew attention to it. We recommended that the Government should formally link local transport plans with local authorities’ local plans covering new development across their areas. The committee found that transport planning and local planning were seldom sufficiently integrated, and, for example, homes were frequently being built without access to public transport.
In contrast to many other countries, our planning system does not have an objective of ensuring that additional housing is produced where the density of population will make public transport systems more viable. By opting for out-of-town new estates of low-rise houses—even if they are closely packed together—typical new developments in the UK create poorly served settlements which depend on private cars for journeys to work, school, shops and facilities. The Centre for Cities cited the comparison between Leeds and Marseille, which
“have a similar population, but 87 per cent of people can reach the centre of Marseille in 30 minutes by public transport, compared with 38 per cent in Leeds”—
well under half the amount in Marseille.
A 2018 report by Transport for New Homes reviewed 20 urban extensions and found that few were being built with links to public transport. As the Oxford University Commission on Creating Healthy Cities, which I was pleased to chair, noted in 2022:
“Local Planning Authorities have a key role in resisting applications for new developments on suburban greenfield sites that depend upon every house-hold owning at least one car”.
In the Built Environment Committee’s earlier report on meeting housing demand, we noted the opportunities to undertake major residential developments on land around railway stations, creating connections to city centres. It is obviously vastly better for the environment, and for meeting targets for net-zero carbon emissions, to plan for new housing estates to be linked by decent, regular bus services to the neighbouring towns and cities that provide facilities, shops and employment. Reliance on private cars takes us in the wrong direction for meeting climate change imperatives.
The West of England Combined Authority published a strategy last month stating that car use in the region needs to reduce by 40%—a huge drop—if net zero climate targets are to be met by 2030. Congested roads with their pollution from traffic are not only bad for the planet and for health and well-being but a waste of time and energy for commuters, contributing to poor productivity.
Car-dependent new housing estates also prohibit the creation of intergenerational communities. Older people who cannot or do not want to drive cannot live alongside younger households because there is no easy access to amenities—the GP’s surgery, pubs, parks, et cetera. The master planning of each development can make a difference too. For example, Derwenthorpe, on the east side of York, comprises 550 new homes, which are knitted into the fabric of the city through both active travel—an excellent Sustrans cycle lane—and public transport. The developer, the Joseph Rowntree Housing Trust, has worked with the local bus company to bring a regular service through the new estate to the city centre and to encourage the habit of using public transport and taking the bus. A free bus pass for one year has been offered to new residents and around one in 10 has made full use of this facility.
My favourite takeaway from this excellent committee report, therefore, is its conclusion that councils’ local plans—“local development plans” in the terms of the Levelling-up and Regeneration Bill—need to be formulated side by side with local transport plans. The Government responded to this recommendation by telling us that the Department for Transport is consulting on guidance setting out how transport authorities should engage proactively and positively with local planning authorities. Will the Minister update us on progress with this guidance?
New homes will be in the wrong places if public transport accessibility is overlooked and transport plans will miss opportunities for viable services if new housing developments are ignored. Bringing the two together will make for the healthy, environmentally friendly, age-friendly, productive and inclusive communities we all need. I commend the report.
Infrastructure Bill [HL]
Lord Best Excerpts(10 years, 5 months ago)
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Lord Best (CB)
“Housing as nationally significant infrastructure
Within 12 months of the date on which this Act is passed, the Secretary of State shall introduce a bill to change the definition of “nationally significant infrastructure project” in the Planning Act 2008, to include development programmes that contain over 1,500 residential units.”
Lord Best (CB)
My Lords, after hearing about Louis XVI, possum whisperers and a plague of locusts, I think that Amendment 79A might bring us rather down to earth.
Amendment 79A seeks to include major housing developments in the projects that can be defined as “nationally significant infrastructure projects”. The amendment would pave the way for the Bill to address one aspect of the acute problem of housing shortages in the UK. I am grateful to the National Housing Federation for its briefings on this and also for the advice from one of the UK’s foremost planners, Professor Kelvin MacDonald.
Lord Best
I am very grateful to noble Lords for their contributions to this little debate. The noble Lord, Lord Tope, made the point that something has to change. There has to be something a bit more dramatic, I think, than the measures we are currently working on. He also made the point that it is about quality, not just quantity, and one of the great things about a major development is that you can get the quality. If you are building just 40 houses and cramming them into the space that you have, the housebuilder often sacrifices quality. If you have a master plan working to create a garden village or even a garden community—I like that—on any scale, you can make it work because you have the numbers there.
The noble Lord, Lord Jenkin, was supportive of the need to do more but had his doubts about this particular way of helping. He made the point that it is important to identify who is going to initiate major developments. The use of development corporations, with consortia of local authorities, is absolutely the way to create the vehicles that could then take advantage of an easier, fast-track planning system. They would be the chief beneficiaries. It might be through local enterprise partnerships’ city deals. The Olympic Village was a wonderful example of how the growth boroughs in that area collaborated and achieved what remains a very important piece of housing.
Lord Jenkin of Roding
The noble Lord mentioned the Olympic Village. He is quite right to give credit to the local authorities in the area. Having read the report by the London Borough of Newham on what it has achieved through that, I think it deserves the highest praise for what it has done. I have in fact written to the Mayor of Newham to express that view to him.
Lord Best
I agree entirely. The noble Lord, Lord McKenzie, was very supportive but had some doubts. It was important to hear the plans that are now being formulated by the Labour Party. I know that Sir Michael Lyons’s review is due out fairly soon. I think that will be a creative and important contribution to the debate. The noble Lord, Lord McKenzie, made the point that long-term consensus is going to be essential and we have to work our way towards that, even though he has some reservations about this particular approach.
I thank the noble Baroness, Lady Stowell, very much for her response and for underlining the Government’s commitment to increasing supply, which is the essence of this. My suggestion is by no means a silver bullet, that is for sure. Loans, guarantees, et cetera, are all good; it is whether or not the volume that we need is going to be achieved by the measures that are currently there. With regard to reliance on local plans—remembering that you have no duty as a local authority to meet the needs of your neighbours or of the nation—your local plan must relate to the requirements of your own locality, and that may not encourage you to believe that a very major development is within your remit.
I take the point entirely that the pre-application process adds another year or so to the whole, so in total from beginning to end, with the 28 days from the Secretary of State at the beginning, one may well reach three years. But believe you me, three years for a major development is a triumph in relation to the time that we now must wait to get things done.
This is a proposal for a Bill, not a proposal in itself.
Lord McKenzie of Luton
How does the noble Lord see the issue of the use of the infrastructure planning regime for garden cities and new towns, given the scale of what they entail—very big developments over the longer period? The TCPA thought that the infrastructure planning process did not really suit that. That is why I thought we almost had three situations. There is the local authority with its usual planning role and responsibilities for housing. There are new town development corporations with the much needed mega-expansions. My reservations were about the extent to which intermediate positions would be best dealt with by the infrastructure planning regime or by some other route.
Lord Best
I am sure that that distinction is exactly right. A development corporation need not necessarily go for 15,000 homes, which I believe is the target for Ebbsfleet, the first of these new garden cities. We are looking here at the more modest proposals; ones that are none the less enormous in relation to the place. It may well be that the development corporation model works just as well with a master plan for 1,500 homes as it does for 15,000 and the opportunities that that brings with it, requiring something in between the mega and the everyday that can be encompassed within the local plan.
The amendment is a proposal for a Bill within a year of this Bill becoming an Act. That would give an opportunity for that Bill to take forward all the detailed aspects of this, things such as who exercises compulsory purchase powers in these circumstances or whether one requires a national policy statement as for other aspects of infrastructure that would go with this measure. That is all to play for. At this stage, I thank all those who joined in and beg leave to withdraw the amendment.
Lord Tope
My Lords, in moving Amendment 83A, I wish to speak also to Amendment 83C, with which it is grouped. In many ways we now return to the debate we had on the amendment proposed by the noble Lord, Lord Best, and the question asked by the noble Lord, Lord Jenkin, about who would implement large-scale housing developments. Certainly, one solution that was offered was that of local development corporations. The Mayor of London already has that power as regards mayoral development corporations. This amendment seeks to extend that possibility to the rest of the country.
At this hour, I do not need to go into great detail as it is fairly obvious that Amendment 83C speaks for itself. It seeks to enable the Secretary of State to create local development corporations at the request of local authorities. Amendment 83A requires that any such development corporations so established,
“shall include at least one local authority elected member who shall have full voting rights”.
I hope that is self-evident and that it would happen anyway. I move that amendment as a probing amendment at this stage but hope to receive at least an encouraging response from the Minister. I hope that she and noble Lords opposite will at least support the intentions here. I beg to move.
Lord Best
My Lords, I declare the interest that I did not need to declare in my previous amendment, which is that I am president of the Local Government Association, which supports both these amendments. I see them as complementary to our earlier debate on nationally significant infrastructure projects.
I very much hope that wherever a local authority wants to get on with it and do these things, we should give it every possible encouragement. I hope that these amendments are both acceptable to the Minister but would just add that it is likely that housing associations would play a very significant role in the development corporations. Many local authorities will not themselves be undertaking development on such a scale, and co-operation and partnership with housing associations will also be incredibly important in making the development corporations work.
Lord McKenzie of Luton
My Lords, we are happy to support these amendments. I say only, in relation to the proposal to have one local authority elected member, that the key thing is not so much status on a board and voting rights but the imperative of engaging with the local authority. That is probably behind the amendments, which I am happy to support.
Lord Tope
My Lords, I have tabled Amendment 83B to enable us to have what I hope will be a short but interesting debate on custom-build housing. This will give the Minister an opportunity to respond with examples of the Government’s enthusiasm for it, which I know is there. I am conscious that this time on a Thursday evening is probably not the best time to initiate such an enthusiastic debate. I am not suggesting for one moment that this is the answer to the housing crisis we discussed earlier today. Plainly, it is not but it is a small and useful part of the answer. There is a growing interest in custom-build housing so perhaps I should be clear for the record what is meant by that. It includes both self-build housing, where the owner builds it himself, and those where individual commissions for building are of a house. I think that the phrase custom-build housing has now been adopted to cover both.
The LGA tells me that one in 10 new houses in the UK is custom-built. If that is the case, as I am sure it is, it is a small but significant part. It is one which is growing and in which there is considerable interest. My part of the Government are certainly very keen to encourage it and if this fairly simple amendment—which, as I said, was intended to create a debate—were enacted it would encourage local authorities to make provision for custom-build housing in their assembly of land. It would give further stimulus and encouragement to what is, as I say, a growing market and make a contribution—perhaps a relatively small contribution but a useful one—to meeting the housing need. It would also meet it in a way which most directly meets the needs of those who wish to use that housing, because it is their housing in every sense of the word. With that brief explanation and introduction, I beg to move.
Lord Best
I will not prolong the debate late on a Thursday, but I add my support to this amendment and note again that the LGA is keen on it. The major housebuilders have moved up from building 46% of the nation’s housing to building 70%. We are becoming incredibly dependent on a handful of very large housebuilders and we need to get back to having the SMEs, the small and medium-sized housebuilders, getting back into business. Many were wiped out during the credit crunch, the recession, and we need them back again. This is a way of ensuring that they can come back, because what they lack is the opportunity to get their hands on land. This is made easy for them by the use of the custom-build technique and this amendment would help in that process. In Germany, they build something over 40% of all their housing on this basis of land being assembled and housebuilders building sometimes a single house but sometimes several houses on the plots that are made available.
There is a slightly sinister aspect to the bringing back of the SME housebuilders, which is the notion that the smaller housebuilders and those developing smaller sites—smaller housebuilders and smaller sites often go closely together, because the big players do not want to deal with small sites—would not in future have a requirement for the provision of affordable housing attached to the consent. It is a government concept, which has yet to be enshrined in any way but is subject to consultation, that sites with perhaps fewer than 10 homes would not be required to have any affordable housing within the mix. One might think that with 10 homes that does not much matter, but in rural areas nearly all the village schemes for affordable housing for local people are of fewer than 10 homes. Something like 70% of all rural schemes are of fewer than 10 homes. The thought that this will help small housebuilders to do more is misguided.
It is the land, which is the subject of this amendment, which is preventing the small players doing the kind of housebuilding they used to do. They cannot get their hands on sites. It is not that they need to have special concessions and reduce the amount of affordable housing that they build, just as it is not the case that smaller schemes should have the requirements removed from them for sustainable housing for the move towards carbon neutrality by 2016. This amendment seeks to bring back those small and medium-sized housebuilders. Those amendments which seek ways of lowering standards or of removing the requirement for affordability are missing the point. It is this one which would help bring back those housebuilders in such a way that we do not make any sacrifices in terms of quality.
Lord McKenzie of Luton
My Lords, I am happy to support this amendment and I support the points made by the noble Lord, Lord Best. Doubtless, the Government will make reference to their custom-build fund, which was announced a couple of weeks ago. As for our plans for custom build, we support an actual requirement on local authorities to include a higher proportion of small sites in their five-year land supply, in order to boost small and custom build, and to guarantee access to public land for smaller firms and custom builders. As I think I said before, to make sure that we give people the chance to sign up to a waiting list for custom build, co-operative homes or community land, trust projects with local people have been the priority. We are certainly supportive of custom build, but we await with some trepidation the outcome of the Section 106 consultation for smaller sites.
Growth and Infrastructure Bill
Lord Best Excerpts(11 years, 9 months ago)
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Baroness Whitaker
My Lords, I agree with my noble friend Lord McKenzie’s inference from the responses to the consultation and welcome the direction of travel of the Minister’s amendment, but I shall argue for more specificity in the Bill. I speak to Amendment 10 in my name and that of the noble Earl, Lord Lytton, who regrets that he cannot be here today. What I shall say has been drawn up with him, and I am grateful for his expert support and that of the Town and Country Planning Association. Perhaps I should also declare that I am an honorary fellow of the Royal Institute of British Architects.
Our amendment is tabled because of a gap in the concept of designation. Of all the evidence of poor performance by a planning authority, the one that has a particularly adverse effect on quality of life, as well as the local economy, is bad design, coupled with lack of sustainability, but that is not specified in the Bill. That power is open to wide discretion, whereas, at the other extreme, the consultation’s proposals for failing authorities are pretty mechanistic and relate to speed and appeal decisions—not tests of quality but, rather, tick-box exercises to check compliance. The impact of designation on local democracy is very powerful, and speed and compliance with the NPPF with regard to appeal decisions should not, I submit, be enough to prompt a designation decision. That should be taken in the round and take full account of the quality of outcomes. That is particularly important because the broad principles in the NPPF are themselves open to quite a degree of interpretation.
The two extremes of a vague, wide power in the Bill and narrow, mechanistic tests for failure omit the real point of good planning—to approve development that is durable and practical, acceptable to residents and capable of improving their total environment as well as, in the long term, saving public money. That cannot be done without an informed approach to design; but design capacity is still very patchy among planning authorities, and many succumb to the will or blandishments of developers who may well not have the long-term interest of the local community at heart.
Therefore, the amendment makes it necessary for the Secretary of State to consider what the authority has done by way of contributing to sustainable development and good design, which complements existing duties in planning legislation rather than enabling them to be overridden. He has also to consider, in addition, what the local views are so that, for instance, if a neighbourhood has developed design criteria but cannot get the planning authority either to accept them or to draw up its own, it is not short changed by the process. Finally, he must consider what any wider public interest might be. That latter obligation enables discretion to be used when necessary, so that it is not a matter of a fixed threshold being triggered. Finally, the Secretary of State must publish his or her reasons for designating according to the criteria in the amendment, which element of transparency I hope that the noble Baroness will also support.
In conclusion, the amendment would go a long way to protect residents from the kind of system failure in design and sustainability which poor planning authorities all too often let themselves in for. In that way, growth and infrastructure really could work properly. I commend the amendment.
Lord Best
My Lords, I speak in support of Amendment 10 in the names of the noble Baroness, Lady Whitaker, and the noble Earl, Lord Lytton. As this is my first intervention on Report, I note my relevant interests as president of the Local Government Association, chair of Hanover Housing Association and, in the context of the amendment, which concerns good design, vice-president of the Town and Country Planning Association and honorary fellow of the Royal Institute of British Architects.
In support of the intention behind this amendment, I would like to quote from an excellent speech delivered by the Minister for Planning, Nick Boles, to the Town and Country Planning Association shortly before Christmas. He said:
“People look at the new housing estates that have been bolted on to their towns and villages in recent decades and observe that few of them are beautiful. Indeed, not to put too fine a point on it, many of them are pig ugly”.
He went on:
“Since new housing estates are all too often soulless and formulaic ... existing residents oppose any proposal to build new houses on green field sites, even when the land is of low environment quality”.
He continued:
“In a nutshell, because we don't build beautifully, people don't let us build much. And because we don't built much we can't afford to build beautifully”.
He later said:
“It is now for the planners, architects and developers, large and small, to seize the opportunity we have created and start designing beautiful places, which local people will welcome”.
Poor design not only affects the lives of the people who occupy the new buildings, it also affects those who live in the same neighbourhood. Because so much new development has been, as Nick Boles says, “pig ugly”, the great British public regularly turn out to stymie and oppose the creation of the new homes that are so essential to ending acute housing shortages.
This amendment would strengthen the emphasis on good design, which should always be a hallmark of projects obtaining planning consent. It would, thereby, make it easier to gain the consent of local communities to the building of the new homes this country needs so badly. I strongly commend it.
Lord Jenkin of Roding
My Lords, I intervene very briefly to say that I very much welcome the amendments that my noble friend Lady Hanham has tabled to this clause. I have recognised from the beginning that it has been very controversial, not least among local authorities. I, too, declare an interest here as a vice-president of the Local Government Association. I have made it very clear to the association that I support the main thrust of Clause 1, but equally I recognise its desire to see the criteria dealt with more formally in the legislation. The indications that we have had from the Government in this context have been helpful, as has the Government’s amendment that it will be subject to regulations under the negative procedure, as my noble friend has indicated. These amendments are very welcome and take some of the sting, which local authorities have felt, out of the clause.
Local authorities need not be so worried about the remarks made by the noble Lord, Lord McKenzie of Luton, whose handling of this legislation I have always admired; he is extremely thorough. He quoted some of the figures from the summary of the consultation response, which I downloaded on my computer yesterday and read. The important thing to recognise is that, in the light of what I have just said about the general attitude of most local authorities towards this clause, it is hardly surprising that the response rate was not much more than 40 to 45%. One has to recognise that of the 227 replies received, 67% were from councils. A further 12% were from local government, professional or environmental organisations, and around 12% were from development interests or business groups. It was a pretty unbalanced response, but that is the nature of consultation; it is the people who feel strongly about such matters who respond. I am sure that those in the development industry look at the clause and say this is a step in the right direction. It is not surprising, given the figures quoted by the noble Lord, that there should have been what is, in a sense, a very heavily weighted response on the part of the local authority world. This does not in any way detract from the support I give to my noble friend for the amendments that she has tabled to this clause. I think that, with these amendments, the clause is a good deal more acceptable and I welcome it.
Lord McKenzie of Luton
My Lords, the intent of the amendment would be to restrict the application of the provisions relating to modification or discharge of affordable housing requirements to those that were agreed prior to Royal Assent. That amendment was tabled by the noble Lord, Lord Best, in Committee, and I am delighted that he has added his name to it today. I should make it clear that this is not an attempt to usurp his role in this; nobody knows the issues better than the noble Lord, but I was not sure whether he would bring it back.
If these provisions concerning renegotiation of Section 106 agreements are not to be removed from the Bill, they must be constrained. We will come on to sunset clauses shortly, but we should note that the Government’s proposition is only one small step from where the Bill now stands. In Committee, we acknowledged the significant contribution that Section 106 agreements have made to this country’s need for affordable housing. We have noted that local authorities have existing powers to renegotiate Section 106 agreements and that many are using these. We remain sceptical about the need for these new powers. However, notwithstanding these concerns, on the basis of the Government’s own logic, there is no need for the rights in the Bill to carry on for ever. If the rationale for Clause 6 is that developers entered into Section 106 affordable housing obligations when economic times were better, is it the Government’s position that things will continue to get worse?
If the clause is to be brought to an end in three years, unless the Government are expecting a further downturn in this period, it should not stand in its current form. When we debated this in Committee, the Government argued that there was continuing uncertainty in the market. That may be the case, but presumably the Minister is not arguing for a risk-free platform for developers. Clause 6 was, we understand, supposed to address the substantial change in market circumstances fuelled by the global financial crisis of 2008. Applicants should not agree to Section 106 agreements that they consider will render their development unviable. The use of viability appraisals in negotiations is becoming increasingly common.
We have added our names to Amendment 28 which, as we have heard, would introduce a sunset clause bringing to an end the provisions relating to the modification of affordable housing obligations after three years. Given that very new affordable housing requirements are unlikely to be able to make successful applications, this would generally mean a practical cut-off point of obligations entered into by about 2014. So far as the Government’s version of a sunset clause is concerned, this does not move us much further than the Bill, which already gives the power to the Secretary of State by order to repeal Sections 106BA and 106BB of the Town and Country Planning Act 1990. The Government’s version of a sunset clause, while repealing those sections at the end of April 2016, also gives the power to the Secretary of State by order to substitute a later date. In effect, there is no clear end date to these provisions. Therefore, we will look to the Government to explain in detail, when they speak to these provisions, why the firm date of April 2016 is not sufficient. If we are not satisfied, we reserve the right to return to this matter at Third Reading. I beg to move.
Lord Best
My Lords, I have added my name to Amendment 22, which was prepared by the Local Government Association. I am grateful to the noble Lord, Lord McKenzie, for introducing this amendment and explaining its purpose and value. My overarching concern is that the intention of Clause 6, which is to see stalled development up and running swiftly, will not materialise without substantial changes to this clause. Indeed, the knowledge that central government may overrule legal agreements between local government and house builders may encourage exactly the wrong response from some elements in the housebuilding industry, and this measure could backfire.
The Clause 6 procedure offers relief for house builders where they have paid too much for a site and now wish to be excused from their obligations to provide affordable housing. Amendment 22 would mean that only agreements already made could be addressed by going down this Clause 6 route. The practice of developers speculatively outbidding others—including housing associations keen to buy a site and fulfil the affordable housing obligations on it—would not be perpetuated into the future. It would no longer be possible for developers to say, “Let us gamble on house prices rising, but if they do not do so, we can go to the Planning Inspectorate and secure a release from our Section 106 agreement”.
In my most charitable moments, I can feel some sympathy for the small builder who is unable to work on a swings-and-roundabouts basis of some highly profitable and some less profitable site purchases and who unwisely paid too much for a site at the height of the boom some four years ago. The bigger house builders are currently doing very well. Persimmon and Bovis have just reported huge increases in profits of more than 50% and more than 60% respectively. Some smaller developers, however, may have been caught out in 2008 or 2009, thinking house prices would rise inexorably when they have been pretty flat outside London and the hot spots. Nevertheless, surely we do not want to encourage continuing speculation on the basis that, from now on, the state will bail out those who bite off more than they can chew. Any developer entering into a Section 106 negotiation at the current time is clearly doing so with their eyes open to the economic realities of the day. These negotiations make use of viability appraisals and the signal must go out to house builders that they can no longer sign agreements in the expectation that they will not really be necessary to honour those agreements because central government’s planning inspectors will set aside their obligations if the developers can show that they will not make a profit of 20% or so.
This amendment draws a line under state intervention in these Section 106 agreements from the date that the Bill becomes an Act. I strongly support it. Alternative amendments for a sunset clause three years hence seem to miss the point. It is now that we want people to get busy and get started on sites that they own and are currently stalled. Every time a local agreement to produce more affordable housing is set aside, households on low incomes waiting for a home are forced to wait longer. We should ensure that this happens on only the rarest occasions. I strongly support an amendment that would stop the perpetuation of the opportunity for developers to renege on agreements that they have signed with local authorities from henceforth.
Lord Shipley
My Lords, I will speak to Amendment 28. I strongly support Amendment 22 and the principle behind it that only planning obligations agreed prior to Royal Assent should be included in the Bill. Amendment 28 is a sunset clause, and the Government have, through their own Amendment 32, accepted the principles of this. Our view is that no applications should be made under this section three years after its coming into effect. I accept that there may be a case to give power to renew or extend a subsection if economic circumstances demand it. However, I am not convinced that it should be open-ended and effectively give a power to the Secretary of State to extend it for as long as he would wish it to be extended. I am seeking from the Minister some clarification as to what the Government’s intention actually is with their Amendment 32.
I will be very precise about the questions to which I think the House should seek to secure answers. It would be helpful if the Minister could refine her amendment at Third Reading, so that any extension to the time limit should be for no more than two years from the date it is proposed. That would have to be before April 2016, so it would give an absolute time limit of five years. Secondly, would the Minister commit to presenting a report to both Houses before bringing forward regulations to extend that time limit? Would the Minister also commit to consulting with social housing providers and others prior to presenting that report, in order to inform its contents? Thirdly, will the Minister also commit to accepting the will of both Houses in any vote to extend the time limit?
The Government should still look to extend Clause 6 to include the full range of planning obligations. Not only would this challenge any perception that the Government viewed affordable housing as of secondary importance in planning terms; but if other obligations are causing the delay, that could remove significant impediments to that development. We will have a chance in a further amendment to look at that a little more closely, but I remain concerned that the Government’s amendment is too open-ended.
Lord McKenzie of Luton
My Lords, I turn again to the tardiness of the criteria. The noble Baroness may have been able to look at them over lunch; I was dealing with the consultation responses, which arrived on my desk this morning. Having said that, we need to study the guidance and reserve our right to deal with any residual issues on Report. I was not going to move this amendment, but I did not want to leave hanging the two important amendments tabled by the noble Lord, Lord Best. The purpose of Amendment 25 is to say that it should not just be left to guidance; there should be a process and a statutory instrument that deals with viability issues, given its importance. I will be happy to reserve judgment on that once I have had the opportunity to study in detail what was issued to us late last night. On that basis, I beg to move.
Baroness Hanham
My Lords, I apologise. I always manage to do this once, sometimes more than once. Perhaps we can rest a moment before we hear from the noble Lord, Lord Best.
Amendment 25, in the name of the noble Lord, Lord McKenzie, which I have noted but which I shall say more about, requires local authorities to have regard to regulations setting out how viability will be assessed. Those regulations are to be subject to consultation and the affirmative procedure. I hear what the noble Lord says about returning to this at Third Reading, but in the mean time it might be helpful if I just go through where we are.
The draft viability guidance has been circulated to assist the House’s understanding of how developers, local authorities and the Planning Inspectorate will approach the new process. It is an early draft, and we intend to discuss it further with professional bodies and interested groups before a final version is issued on Royal Assent.
Noble Lords will see that the basic principle of the guidance is that it works with existing industry practice on assessment of viability. It strongly encourages developers to use the same methodology and basic assumptions as in their original assessment and to focus on what has changed. A number of technical questions have been raised on the draft viability guidance. If it would be helpful to noble Lords, I am happy to have a meeting between now and Third Reading to hear views and see whether we can resolve, or at least discuss, some of the issues.
There is a good deal of technical information in the draft guidance, which needs to be kept under review. Using secondary legislation would not allow the flexibility to adapt to changing circumstances and data that statutory guidance offers.
Noble Lords will recall that the legislation for the community infrastructure levy, introduced under the previous Government, makes provision for statutory guidance. That covers the assessment of viability for the purposes of setting the levy. It is a model that allows for the required flexibility and is one that we intend to follow.
I hope that, with that reassurance, the noble Lord will withdraw his amendment, even if only for the moment.
“( ) the modifications necessary to ensure that if the market value of the development has increased over that predicted before the first application under section 106BA in relation to the obligation, the developer will pay a contribution proportionate to the increase in value to the local planning authority, solely for the purpose of providing local affordable housing linked to the development plan for the area.”
Lord Best
My Lords, I shall speak to Amendments 30, 31 and 35. I preface my remarks by thanking the Minister for a really helpful and lengthy meeting at which a number of my earlier amendments were discussed. On the basis of that discussion, I have dropped three of my amendments, either because I have better understood where the Government were coming from or because I noticed some modest amendments along the way. I was extremely grateful for that more than helpful discussion.
Amendments 30, 31 and 35 all address the hazards in Clause 6 and are intended to ensure that the clause achieves what the Government intend: to get developers on site and building new homes as a quid pro quo for being able to increase their profits on sites where they have previously signed up to obligations to allocate some homes for affordable housing.
Amendment 30 would protect the local authority, the taxpayer and the people who need affordable housing from developers being excused from their obligations on the grounds of expected low house prices today but making substantial profits in future when house prices have risen appreciably. The amendment inserts a clawback provision for the local authority to receive payment in kind if values rise more than expected. A highly unsatisfactory outcome from the use of Clause 6 by a developer to secure a reduction in the affordable housing on its site would be for it simply to await house price increases and make a killing later. Then, the developer would see bigger gains in the years ahead, but the whole purpose of the Bill—to get sites developed today—would be thwarted.
When I brought a similar amendment from the LGA before your Lordships in Committee, the proposition was that local authorities should share a proportion of the profit from future sales if they turned out to be at higher levels than had been expected when the deal was considered by the Planning Inspectorate. The revised amendment is intended to address concerns raised by your Lordships that that route would not be appropriate. The new version would ensure that the local authority could claw back only a commuted sum—payment in kind—in the form of finance specifically to replace some or all of the affordable housing in the original planning obligation, probably to build offsite. That seems entirely reasonable and I hope that the revised amendment will be acceptable to Ministers.
Amendment 31 takes the story forward. It is intended to address the situation where, after a Clause 6 negotiation has reduced the previous requirement for affordable housing, the developer does not, as the Government hope, start swiftly on site but instead awaits the moment when the market is more favourable and prices are higher. The primary reason why sites are stalled is the reluctance of housebuilders to press forward with developments of homes for sale because the local market is sluggish and, if they build too quickly, it will be impossible to achieve the prices they desire.
Even if they are allowed to produce fewer affordable homes—homes which are usually transferred to a housing association for rent or shared ownership—the market for outright sales will remain the same, and the housebuilder may well prefer to await an upturn rather than, despite the earnest hopes of the Government, getting going with the building work which is so badly needed. Amendment 31 would compel the developer to commence construction within six months if it receives a favourable outcome from invoking the provisions of Clause 6 and secures a reduction in its legal obligation.
That is a fundamental point. Unless there is a benefit to society in the form of a rapid start on site, most people would surely ask why the state should be intervening retrospectively to overrule a legal agreement between a local council and a housebuilder simply to increase the profits of the latter. Why should central Government step in when a speculative land purchase now means that a development is not as profitable as the housebuilder had hoped? After all, no one has suggested that local authorities should pursue housebuilders for an increase in the quota of affordable housing when, a year or two after an agreement was signed, house prices rise dramatically, as they did a few years ago, when unexpectedly high profits were made.
If the developer is able to negotiate a reduction in their Section 106 obligations, they will raise the value of the site without laying a single brick. Amendment 31 is intended to overcome this major defect in Clause 6 and require housebuilders to commence construction within six months if they receive a favourable outcome from their appeal. If the Planning Inspectorate has found the development would not have been profitable because of the level of affordable housing required and has reduced that level accordingly, there should be no good reason why the developer should continue to sit on their planning approval. Instead of being accused of land banking, they should then start delivering the homes the UK so badly needs.
Finally, Amendment 35 puts the finishing touches to these proposed changes to Clause 6 by raising the threshold of what defines commencement of development on site. Planning permissions do not last indefinitely, and in considering whether to extend a permission or allow it to expire, a local authority considers whether the developer has commenced development, defined as a “material operation” in Section 56 of the Town and Country Planning Act 1990. The Act sets out what a developer has to do on site to implement a planning permission. The physical works that make up a “material operation” can be relatively minimal when compared with the totality of the development— for example, digging a trench or starting to lay a road. Case law is clear that it does not matter if the developer carries out those works simply to keep the planning permission alive, rather than with a genuine intention to complete the development. If developers have to start within six months, but simply dig a ditch, Amendment 31 has not taken us forward.
I moved an amendment in Committee to enable local authorities and developers to agree at the outset what the definition of commencement would be. The Minister’s response, which I fully understand, was that this would create a postcode lottery, with every council doing things differently. The problem might be countered with non-statutory guidance on best practice. However, in recognition of ministerial concerns, I am now suggesting an amendment that raises the threshold of what is defined as commencement. This amendment would alter the current definition of what constitutes a “material operation”. It would require a certain percentage of, for example, the foundations to be completed to count as a material operation and thus keep the planning permission alive. Spelling this out would have the benefit of certainty. It would encourage developers to move from commencement to completion faster in the future because a greater proportion of costs would have been incurred at an earlier stage.
In combination, these three amendments salvage something sensible from Clause 6 and save the Government from falling into a trap. The worst possible outcome would see the clause to reduce the amount of affordable homes that developers are required to build proceeding, but developers still not getting on with the job and instead banking the increased value gained from having their obligations reduced and waiting until house prices, pressurised by escalating shortages, rise and bigger profits can be made. I beg to move.
Lord Deben
Before the noble Lord sits down, may I ask a question because there is something I do not understand? What is there under present law to stop a local authority saying to a developer, “Yes, we’ll agree to this, but there are other conditions that are part of that deal”? All that the noble Lord suggests could be perfectly properly achieved in a deal with the local authority. What sort of local authority would give its permission without such a deal taking place?
Lord Best
These cases are historic, dating back to 2008-09, where a Section 106 agreement has been signed that does not specify that commencement on site must happen within six months or what commencement on site means, other than within the law. The agreement has not been, if you like, sharply enough defined, although it has followed standard practice. The opportunity then exists for the developer to say, “I don’t wish to proceed on this basis. I shall use Clause 6 and the Planning Inspectorate to reduce my obligations. Even though I signed up to that, I don’t want to be held to it any longer because I have decided that the profitability of my scheme would be increased if I waited some time and did the development later”. These amendments put pressure on the housebuilder and enable the job to be started.
Baroness Hanham
My Lords, I thank noble Lords for that debate. The noble Lord, Lord Best, explained clearly that his amendments are aimed at ensuring that development happens. We all want to ensure that happens, as there is otherwise no purpose in this clause. I understand the desire that, in return for an adjusted affordable housing obligation won at appeal, a developer should get on and build. Planning consent is permission to build; it is not a requirement to build. The purpose of this clause is to give developers an opportunity to build, allowing them to review schemes against prevailing market conditions and secure a viable affordable housing agreement. We should remember that without this clause many housing sites will not come forward at all, which is not what we want. Of course, having put in place a revised agreement, we want developers to build, and that is the purpose of the amendment tabled by the noble Lord, Lord Best.
Clause 6 places a three-year time limit on modified obligations made on appeal. If the development is not completed within three years, which is the other side of the coin that the noble Lord referred to—he was talking about commencement while I am talking about completion—the original affordable housing requirement will apply to those parts of the scheme which have not been commenced, so there is a difficulty for the developer in that. Developers are incentivised to build out as much of their scheme as possible within those three years. It will not be sufficient to commence one part of the development to secure the revised affordable housing obligation for the whole scheme.
For example, on a scheme of 100 homes, if 50 units are completed at the end of the three years and the remaining 50 are not commenced, the appeal decisions would require that the original obligation would apply to the remaining 50—so we would go back to 100. If developers are concerned about the viability of their scheme at the end of the three years, they can seek to modify the agreement again. This could be done through voluntary renegotiation or by making a new application under this process.
We believe that the clause ensures that we incentivise build-out and completion. Local authorities are not bound by a three-year decision, but we are clear in our draft guidance that they can follow similar time limits prescribed for appeal decisions. We believe that this decision is best made locally. Where the matter has gone to the planning inspectors, the local authority can of course put its own evidence to the Planning Inspectorate, which could include evidence on commencement of the development. That could become part of the modified planning obligation if the planning inspectors agree to it.
I hope that the noble Lord will take some comfort from our being aware that local authorities have a wide range of tools and powers to encourage development. Those may be through the way they use the Section 106 agreements flexibly or in the way that they support development through investment in infrastructure or the use of land assets. We are aware of local authorities which have introduced clawback agreements to incentivise developments and we understand that those may be appropriate in some circumstances.
More specifically on Amendment 31, which prescribes a six-month commencement for appeal decisions, I said in Committee that I thought setting a six-month period in primary legislation was too prescriptive. I am particularly concerned that placing a six-month limit to commence development will allow little time for developers to get on site—this is the other side of the coin that we have just been talking about. Not all schemes will be ready to go when they are renegotiated. Regeneration schemes where land is in multiple ownership or where planning conditions need to be met before development can commence could be excluded from this process by the six-month limit. Sites where significant work, such as decontamination, needs to be done to prepare the site for development could be excluded. We want to ensure that we deliver as many homes as possible through this measure, not through an overly prescriptive approach, which could be counterproductive and end up with these measures having no effect.
In Amendment 30, the noble Lord, Lord Best, proposes to require the Planning Inspectorate to introduce a clawback in appeal cases whereby the local authority receives increased funds for affordable housing if the market rises. I oppose this amendment because it requires the Planning Inspectorate to make provision for a clawback agreement, which would impose a requirement that will not be appropriate in all cases. I am also concerned that this amendment might have unintended consequences. In cases where a variable agreement would be onerous and unnecessary, the inclusion of the amendment could discourage developers from appealing. We need developers to engage in this process and ensure they can secure viable agreements and we can then secure the affordable housing.
I will now turn to the new clause on redefining commencement. The definition of commencement and material operation serves a wide range of purposes in planning law. It triggers the payment of community infrastructure levy and Section 106 revenues. Perhaps most importantly, it is used by local authorities to establish whether a development needs planning permission and can form the basis of enforcement action if a material operation has taken place without permission. In short, the amendment would have far-reaching and fundamental consequences that go far beyond its intention, which is to prevent developers from doing a minimal amount of work lawfully to implement a planning permission. The noble Lord spelled that out quite clearly.
Changing the commencement threshold in the way envisaged would not have a substantial effect on the behaviour of developers. Any new definition of commencement would simply create a new minimum threshold for such developers to build to. The additional costs for a developer in doing so would be unlikely to be significant in the context of an overall construction budget. Furthermore, the complexity of the threshold proposed would result in uncertainty and confusion that would affect all parties involved in the planning process, including local authorities. As the definition of development is a highly contested part of planning law, it would be likely to result in a significant rise in legal challenges as the courts interpreted the new definition. Any legal definition of commencement should be exactly that: the point at which a development is commenced. It would be counterfactual at best to say in legislation that a building project where the foundations or roads are 49% complete or where only 99% of the pipes have been connected has somehow not legally begun.
In short, while I recognise the problem, this is not the right solution. It would do very little to address the problem, while it would have wide-ranging consequences for other areas of planning practice and have a very significant adverse impact on local authorities, developers and third parties. There is already a power available for a local planning authority to serve a completion notice to deal with uncompleted development. However, a far more productive approach would be to address the underlying reasons for developers delaying their schemes. The Government recognise the importance of this through a number of initiatives, such as the £570 million Get Britain Building fund to unlock stalled sites.
I hope that with these comments the noble Lord will feel able to withdraw his amendment.
Lord Best
My Lords, I am very grateful for the debate that this has stimulated and for the interventions from the noble Lord, Lord Deben, and the noble and learned Lord, Lord Mackay. We have explored an issue and taken it a little bit further than anyone has before in these public fora. These ways of trying to persuade the developer to start building—which is what we are all about—are quite difficult, and it is quite messy to concentrate on defining where commencement really lies. Concentrating on completions of developments which are, obviously, at a later date than my six months for a start, sounds a much improved way of looking at this. I had not appreciated—and I am not sure if others had—that it will be possible for the Planning Inspectorate to place conditions relating to a timescale and a definition of starting on more than simply the reduction in the amount of affordable housing. The assumption has been that it is the reduction in affordable housing that the planning inspector can talk about, and these other, more sophisticated, aspects of getting things going have been beyond the remit of the Planning Inspectorate when these appeals come forward. We are hearing tonight that the planning inspector could, in a way, substitute for the negotiation that has failed at the local authority and developer end. These cases have gone forward only because earlier negotiations have failed. It could be that the planning inspector could substitute for that and come up with a set of requirements that go with the consent to drop the amount of affordable housing.
I am grateful to the Minister for explaining these issues in more depth. I will go away and think about them and hope that, within that explanation, there are the seeds of hope.
Baroness Hanham
My Lords, I need to answer this. The inspector will have the power to say that these developments have got to be completed within three years.
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Lord Best
My Lords, I move Amendment 82, and will also speak to Amendments 86 and 93ZA in this group. This will take a few minutes, but I hope that your Lordships will find it worth while.
These amendments all relate to the devolution from central government to local government of decision-making about council tax discount schemes. The Committee has discussed extensively the principle of devolving responsibility for these discounts—the old council tax benefit—from the Department for Work and Pensions to local authorities. The noble Baroness, Lady Hollis, and others have made the case very eloquently that localising the support for those on low incomes has distinct disadvantages over it remaining centralised and becoming a part of the new universal credit arrangements. The Local Government Association, of which I am president, and some Members of this Committee, most prominently the noble Lord, Lord Deben, take a contrary view.
My amendments concentrate not on whether the arrangements should be localised, per se, but on the ways in which localisation can be made to work properly. The amendments are aimed at making the process of localising council tax benefit or discounts fit for purpose by allowing local authorities proper discretion to tackle the difficult position in which they are placed because of the requirement on them to save a further £410 million per annum.
My starting point in pursuing these amendments has not been so much about the principle of localisation but about addressing the implications of the cuts, which could mean taxing many poorer households throughout the country. If the £400 million has to be paid by those currently receiving council tax benefit, bringing them into the tax system where they have not previously been required to pay, those households must dip into other benefits provided for them to pay for their food, clothing, heating and so on. As I spelt out at Second Reading, these are the people who have gained the least from the boom years of the UK economy, and I am anxious that through this Bill their standard of living is not reduced further.
I recognise that I am not going to prevail in reversing a Treasury decision on cutting public spending. I have learnt from previous efforts to spare those on the lowest incomes from the imposition of the new bedroom tax in the Welfare Reform Act that even when your Lordships give wholehearted support to such measures, the other place is very likely to overturn the decisions taken in your Lordships’ House, no doubt using financial privilege as the basis for its objection. But while we may be powerless to prevent this latest reduction in support to local government, because of the overriding necessity for deficit reduction, we can influence the way in which that cut in funding is distributed. In particular, my hope is that we can amend the Bill so that local authorities can safeguard some of our poorest citizens from the necessity to start paying local taxes out of their very low incomes.
From the perspective of local councils, there are practical problems in being asked to raise revenue by reducing discounts on council tax for the poorest households. The cost of collecting council tax from those with no spare income is likely to be very high. Because arrears and the cost of prosecuting those who fall into arrears will be a serious problem, the amount to be found by each council is likely to be much greater than the headline figure of 10% of last year’s council tax benefit bill. Costs seem certain to grow as more people become eligible for help. The 10% CTB cut is clearly an underestimate of where this is all going, and it comes on top of the 28% of cuts in government funding which local authorities are already having to handle.
Amendment 82 and the consequential Amendment 86, which need to be read with the subsequent Amendment 93ZA in mind, start with the premise that local authorities, in facing up to the new cut, need to be able to use their discretion, creativity and sense of priorities in determining who should pay in their local communities. What irks local authorities, in being thrust reluctantly into the position of tax collectors from the poor, is that central government is giving them new responsibilities but denying them the autonomy to decide how best to discharge those responsibilities. In several respects, government is tying the hands of councils and requiring them to implement the cuts in centrally determined ways that are quite counter to the ethos of localism.
My amendments, put together by the Local Government Association, seek to liberate councils from several straitjackets prescribed by Whitehall and thereby to enable every local authority to do what it sees as best in its own local circumstances. Amendment 82 addresses the insistence by central government that current council tax support for pensioners be left alone so that any cuts in benefits fall wholly on those of working age. I have no desire to see the living standards of any poorer households, including any low-income pensioners, reduced at this difficult time. I would want to ring-fence all those least able to pay, as the current arrangements seek to do. But if I were to single out any one group for less harsh treatment, it might not necessarily be the pensioner group.
I say this for three reasons. First, since this is the largest group of claimants, excluding everyone in it has serious consequences for the rest. Pensioners account for 40% of claimants nationally and for more than half of those eligible for the present CTB in a number of local authority areas. In East Dorset, for example, 70% of claimants are pensioners. Preserving the status quo for pensioners hugely increases, and frequently doubles, the burden on the remaining households. Secondly, this Government and their predecessor have done more to improve the position of pensioners than has been the case for the poorest people who are below pension age. The recent IFS report, Pensioners and the Tax and Benefit System, points out that those over state pension age have seen their incomes increase more quickly than those of working age over the past 15 years. Measures such as winter fuel payments, free eye tests, free bus passes, prescriptions and TV licences have given extra help to pensioners.
Lord Best
My Lords, I am grateful to the noble Lord, Lord Smith of Leigh, for putting his name to my amendment. I am very grateful to the noble Lords, Lord Jenkin and Lord Tope, for their support. The noble Lord, Lord McKenzie, is unable to support the amendment because of the combined effect of the two amendments. I shall respond to his objections, since I hope for support from his side. He objects in principle to the idea that localisation is a way to deal with this issue. That is a fundamental disagreement of principle, and I understand that the Committee is divided on that point. However, if he is unable to secure the amendments he wants to ensure that localisation does not come about, as a fallback, he and his colleagues might consider whether the lesser evil here would be found in allowing local authorities greater discretion to do what they might see as the right thing with the powers that they are going to be given.
The noble Lord makes the point that there is a historic basis for what sounds like a rather pseudo-scientific formula for calculating the 25%. The 25% here is a human invention, based on an assumption that there will be two people in the home and that half of this tax relates to the provision of services. Therefore, if there is only one person, and if one calculated this on a basis that more accurately reflects the real composition of households—and households have got smaller, as we know, over the years—I think that having 1.8 people in the home, and halving that, would create the same position as I find myself in. The precision of a 25% reduction for this purpose is entirely artificial and could be changed if anybody wished it so.
The more serious objection made by the noble Lord, Lord McKenzie, was that this would bring more people into having to make a larger payment than they do at the moment. The average cost across the piece of a reduction from 25% to 20% might be something like 90 pence per person. People in the lower bands, who pay less council tax and for whom the 25% is therefore a lower amount, would have to pay a rather smaller sum than the 90 pence or so per week that would be the average across the piece. I still take the point that some people at the lower end might find themselves paying perhaps 50 pence a week more than they would have done to save people poorer than themselves from having to have their council tax benefit reduced. However, it would be possible to nudge the scheme so that those in the lower council tax bands were not affected and remained at 25%.
As the noble Lord rightly says, more distributional analysis is needed of how one would work it to try to ensure that people on low incomes were not losers in that respect, while still keeping the payment that the rest might have to make at less than £1 a week as a target of the additional cost. That distribution sounds so much more preferable than targeting £3 or £4 a week on the poorest, who currently will have to pay the price of this.
The Minister talked about protection for pensioners. She is very keen that pensioners are not to be harmed by these new measures, as am I. My point is that other vulnerable groups also deserve our attention. Pensioners may not have done as badly as some other groups in terms of other benefit cuts and other ways in which the tax and benefit system have worked over recent years. If it is so obvious to all of us that pensioners need to be singled out, why not allow local authorities, which will no doubt come to that judgment on their own, to make that decision, rather than pre-empting them deciding whether spreading the load more evenly across pensioners would be seen as a preferable route in their own local communities?
I feel entirely dissatisfied that my remedies for trying to ensure that these measures are not harmful to people on the lowest incomes are not meeting with universal approval. However, at this stage, I beg leave to withdraw the amendment.
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Lord Smith of Leigh
My Lords, I have found this debate and the ones previously on Amendments 76 and 76A fascinating. I need to remind noble Lords that I am still leader of Wigan Council. Therefore, for me, this is not a theoretical debate. I will have to determine a scheme within my authority, with colleagues, that will decide who is eligible, who is not eligible, which group will be regarded as vulnerable and which group will not be regarded as vulnerable. It will not be easy. I was going to say that it is not a zero-sum game, but I remind noble Lords that it is not even a minus 10% game; it is a minus 20% game if we exclude pensioners. So we are lucky in that sense.
I find myself agreeing with much of what the noble Lord, Lord Deben, said about localism. I recognise what he said and I agree with it. Where I would differ from him and what we need to recognise is that local authorities come at this with very different needs in terms of the number of people who are receiving council tax benefits, as has been said earlier, and the potential changes, as I mentioned earlier. I already know from being in this meeting that I have 100 more people who will be regarded as needing council tax benefits as a result of their factory closing this afternoon. So these things are changing all the time, and we need to recognise that.
I have had some interesting solutions to my dilemma from various quarters today, such as applying reserves. The noble Lord, Lord Beecham, is absolutely right. My treasurer is already coming to me to say, “You are going to lose probably £500,000 on your council tax collection because these people are not going to be able to afford to pay the cost, so you have to think about that”. We have talked about the problems of increasing demands on council tax benefits as it becomes a local thing, and I think that the noble Lord is right that we will do it much better than it is done at the moment, so that probably will encourage more people who do not claim at the moment to start to claim.
Earlier in this Bill we talked about the problems of business rates and the fact that they will have some risk element, so we will have to put that in. We talked about the flexibility of council tax, which is a very interesting phrase. Perhaps the Minister could let me know whether he means by “flexibility of council tax” that he is going to allow me to put the council tax up and is not going to require me to hold a referendum. I cannot believe that anyone sensible is going to say that they are going to have a referendum to put council tax benefits up: “Please vote for it and you will pay more council tax”. We would never win that, so it is not going to work.
We have heard that we should make further cuts. In my authority I am planning £66 million of cuts over four years. The Government thankfully gave me some warning and we have them in place. If I now have to make more cuts to accommodate all this—probably between £2.5 million and £3 million-worth—where are they going to come from? What have I got to do that I am not already looking at? I need to remind noble Lords that it is the vulnerable groups who rely most on councils’ services. If I cut services to vulnerable groups, they suffer. I can put up daily charges or raise the qualification for receiving social care. All these things affect vulnerable groups and there is no easy solution.
The difficulty for me is this. Presumably all the people we give council tax benefit to are regarded as vulnerable people, otherwise we should not be giving them that benefit. If we start to define vulnerability—here I echo what the noble Lord, Lord Shipley, said, as well as the comments of other noble Lords about the needs of different groups in communities—the danger is that we will define who are the deserving and the non-deserving poor. In the future, there will be people who get council tax benefit support and those who either get less or nothing.
A lot of vulnerable groups have strong lobbying sectors, but the ones who do not get that kind of support are the working poor. I remind the Committee that we are talking about a marginalised and alienated group in our society made up of people who do not vote very much at the moment. But they could be tempted to vote by extremists who say, “We will listen to you”. It is happening in certain communities. People are listening to those who are giving them false promises. We know that Respect, which was mentioned by the noble Baroness, the BNP or whatever group it is will offer things that they cannot deliver. The result of this Bill and the way we will have to design the council tax support scheme will drive more and more people to the political extremes. Are we doing a good job here?
Lord Best
My Lords, I am provoked to give a short preview of the amendments tabled in my name that are to follow—but not tonight. However, I thought I might briefly whet appetites because they relate so closely to what we are talking about. I see that noble Lords are all agog.
These amendments are about more localism. They are about removing some of the inhibitions on councils deciding precisely how they want to raise the funds that will pay the £400 million the Treasury is waiting for. They are about whether pensioners are included or not included as a vulnerable group being decided locally. This is the point made by the noble Lord, Lord Deben. In my full and unamended speech I will say that there are many grounds on which pensioners might already be treated slightly more favourably than some of the other vulnerable groups. I will contend that in respect of the groups that are considered to be vulnerable, local authorities should have greater discretion, and suggest that local authorities should also have greater flexibility in how they raise council tax, not only in respect of the current discounts for empty and second homes, but in respect of single person discounts. I will explain that if local authorities were allowed to vary the single person discount, currently fixed at 25% and set centrally by diktat from Whitehall, some might choose to reduce that discount across the board to 20%, meaning that all those who currently receive it would have to pay another 46 pence a week. It is not a vast sum, but it would raise more than the £400 million across the piece and make it unnecessary for us to define vulnerable groups and get ourselves into all kinds of tangles in reducing support for the very poorest in our communities. In advance of moving those amendments and in the context of this debate, I thought that noble Lords might like to hear the preview.
Lord Beecham
My Lords, we have had a longer and more entertaining debate than many of us thought we would have. We had the Browning versions, two of them, and we have had an interesting conflict between Norfolk and Suffolk. I hesitate to arbitrate between those two counties. In relation to the remarks by the noble Lord, Lord Deben, from time to time, I have been tempted to form a society for the preservation of the postcode lottery. In some areas of policy, it is absolutely the right line to take. We have had too much regimentation and prescription nationally about what should and should not be done.
However, we are not talking about policies here but about the people’s basic right to a minimum income. To take the point made by the noble Lord, Lord Deben, to its logical conclusion, we would have differential benefits across the piece. We would have different benefits for disabled people, pensions, child benefit and whatever up and down the country, determined locally. The noble Lord shakes his head, but where is the difference? The difference that he advances is that council tax is raised locally, but that is an irrelevance to the person looking at his disposable income that he has to deploy in support of his family. Where the localism part should come in—not the faux localism of the Poor Law—is that you would have a national basic minimum entitlement which, if the local authority thought it right, you could increase and enhance benefits. That would seem to be a reasonable application of localism because everybody is guaranteed a national minimum and locally the community may decide to augment it but, in our view, it should not be in a position to reduce it.
One of my noble friends, or perhaps the noble Baroness, Lady Browning, referred to Localising Support for Council Tax Vulnerable People. Paragraph 3.4, about equality information and engagement, states in connection with child poverty that:
“authorities will be required to take into account their local child poverty needs assessment”.
That is fine.
“Local authorities should be able to design localised council tax reduction schemes in a way that best suits local circumstances, tailored to what child poverty looks like”—
looks like—
“in the local area”.
I will tell you what child poverty looks like in any area. It is the undernourished child going to school, perhaps dependent on free school meals. These days, he may have to go to a breakfast club to get a breakfast. According to a recent survey, 50% of teachers are going into schools with food that they can distribute to the children. Child poverty is children going badly clothed, living in fuel poverty so the house is cold, and perhaps with dysfunctional families, although that is, of course, not simply a financial matter. This can occur anywhere. These children can be found in the city that the noble Lord, Lord Shipley, and I have represented and led and in the city that the noble Lord, Lord Smith, still leads. They can be found in villages in Suffolk, I guess, and in Norfolk, and in Kensington and Chelsea for that matter. They can be found anywhere. As my noble friend said, it is not locality that determines the character of poverty. It may possibly exacerbate a basic condition of poverty, but locality is not the determining condition, and it should not be locality that determines the basic support given to children in poverty or, indeed, to any other vulnerable group. To say that this is somehow an issue of localism is to pervert the proper definition of localism. The noble Lord has advanced a weak argument—from the best of motives because, in policy generally, he has a strong point. But in this area it is entirely misconceived.
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Lord Best
My Lords, I support the amendments in this group. The British Property Federation has said that it and others have been deeply frustrated by the way in which a policy that could have been a significant driver of growth and urban renewal has been watered down to such an extent that it will have very little impact. It seems a real shame. TIFs could be such a valuable mechanism in helping local authorities to play a really serious part in achieving local economic recovery and growth. The disappointment is that the Government are planning to control so strictly the numbers of these projects that could be encouraged by being outside the business rates growth levy or the proposed business rate system resets.
I can suggest reasons why TIFs are necessary and useful. The first is that they will help the construction industry, which is in a very bad state—the worst position it has been in for several decades—to become the engine of growth that takes us out of recession once again. We need the construction industry, and it needs the boost that TIFs could bring. Specifically in relation to housing—my pet interest—TIFs would not fund any new housing development, but they could fund the infrastructure that supports and surrounds such developments. I chaired the LGA/DCLG commission on ways in which local authorities could ease housing shortages, and I was struck by how there is synergy between what TIFs can do and easing housing shortages. A housing development can so often not go ahead because the infrastructure scheme that would surround it cannot be financed. I saw a major site, a large site of derelict land in the London Borough of Newham, which needs a big bridge built to bring it to life and enable it to be regenerated for housing, offices and commercial developments. It needed a TIF infrastructure scheme to get it going, but it would pay for itself over a period.
Then there are benefits to central government: higher stamp duty revenues resulting from rising property values—I am trying to appeal to Treasury self-interest here—higher income tax and higher corporate tax due to the increase in economic activity. Then there are savings to central government as people would get jobs and no longer require the social and health benefits they were receiving and there are the social benefits of regeneration. All these things flow from getting this sorted.
As I understand it, what is worrying the Treasury is that TIF funding goes straight on to the national debt. It is counted as being part of public expenditure because local authorities are at the heart of it. If housing associations were the ones doing the borrowing—they could not possibly be—it would not count at all. It is because local authorities are there in the middle of this arrangement that the Treasury finds reasons to block this, other than on a very modest scale— £160 million is not going to get us going. This is a self-inflicted punishment that the Treasury is insisting upon because it is not commonplace in other countries to regard as public expenditure prudential borrowing that is going to be repaid out of a flow of income that is predetermined, clear and visible. The Treasury has decided this, and it could undecide it without troubling any European agreements. I think the anxiety is that the international banking community will say, “They are changing the rules in the United Kingdom. This will scare the international financiers. The UK is up to something with these new TIFs”. I think the international banking community would like to see the UK economy getting stronger and things happening and moving forward. I do not think that the Treasury is right in holding the line on its definition, which is contrary, for example, to the definition of public expenditure in Germany, France or Holland.
It would seem entirely sensible for the Government to adopt a lighter-touch approach in relation to the approval of potential TIF projects under option 2, enabling TIFs to be a really significant mechanism for investment with minimal bureaucratic interference.
Lord Shipley
My Lords, may I add some further remarks about tax increment financing and say how much I agree with all the comments so far on this set of amendments? For several years, I have been absolutely convinced of the importance of tax increment financing for driving cities. In recent months, I have assisted as an adviser to the Government on their cities policy; I declare that interest. This derives from being convinced by the group of eight English core cities and their secretariat, when I was leader of Newcastle City Council, that tax increment financing potentially unlocked growth in a way that conventional capital infrastructure funding schemes did not and could not. I am particularly struck by devolution in Scotland having led to there being, in various states of preparedness, some six tax increment financing schemes on the drawing board.
The importance of this has been exceedingly well explained so far but it really matters financially. This is not just about business rates; it is about other taxes, too. Once growth in building and development happens, other taxes will follow. For example, there will be stamp duty, income tax, VAT and corporate tax revenues, all of which enable the Government to gain from growth in the country generally.
The PricewaterhouseCoopers 2008 report made absolutely clear the potential for the UK here. It drew on 40 years of US evidence and made it clear that this could be replicated in the United Kingdom. Many professional bodies—this is not just a matter for local government—now say that tax increment financing is now a thing for the future and that we must just do it. However, delivering it means that the reins must be loosened by the Treasury. First, TIF should not be treated as an in-year spending decision. Secondly, the Treasury should not place an arbitrary limit on the number of schemes permitted each year. Its consent should apply to all those schemes that meet the criteria. Thirdly, there must be longer periods, of up to 25 years, over which debt can be repaid because investment requires certainty of income for investors. Therefore, TIF cannot just be prudential borrowing with resets. For many potential schemes, 10 years—or seven in the first instance—will not be enough.
I have shared the concerns of such organisations as the British Property Federation and many others, which all urge the Government to look again at tax increment financing to understand its potential for growth, and to encourage the private and public sectors, working in partnership, to make sure that growth can be delivered. It is through growth that government spending can be maintained at its current levels.
The Deputy Chairman of Committees (Lord Brougham and Vaux)
I must advise the Committee that, following a printing error, Amendments 54A and 54B should be numbered Amendments 56A and 56B to Schedule 2.
Lord Best
My Lords, I shall be brief in supporting the amendment of the noble Lord, Lord Warner. We all owe him a debt of gratitude. He was one of the three Dilnot commissioners, along with Dame Jo Williams and Andrew Dilnot. Their report remains the key piece of policy guidance to which we all look to reform the system fundamentally.
I have declared my interest as president of the Local Government Association, which is right behind this amendment. The LGA has made adult social care its highest priority. It is the issue about which it is most concerned at the moment. If we take out the dedicated schools grant, social care is already much the largest area of local government spending. The 28% cut to central government support for local authorities over the current spending review period has not, I am glad to say, led to a 28% reduction in social care services for older people, adults with learning difficulties and others in need of care. Local authorities have absorbed some 85% of those cuts through service redesign and efficiency savings. However, this can go on for only so long before very painful results become apparent.
The cost of adult social care services is now set to rise, on a trajectory that the LGA has calculated, from some £14.4 billion to £26.7 billion over 18 years. That is an increase of 85%. By the time we get 18 years down the road, we very much hope that a series of measures will be in place to head this off before we get to the point at which virtually all local government expenditure must be on social care. However, there is the period in between in which things may get worse and we do not want this legislation to heighten those dangers.
It seems unlikely that a Bill could be introduced before the next election. If something came forward in 2015, it would probably be enacted in 2016 and become effective in 2017-18. We would already be several years down the road. The King’s Fund has estimated that by 2014-15 the gap in social care provision will already have reached £1.2 billion a year. Central government support needs to be in place now. We will get a reset in 2020 but in the intervening period funding for social care is a really important consideration for the Government. Although there may not be an expectation of the noble Lord’s amendment being accepted in its entirety, the sentiment behind it is strongly supported by the Local Government Association.
Baroness Hollis of Heigham
I support my noble friend’s amendment. I am confident that the Minister will not reproduce the rather unwise remarks that we sometimes get on the Floor of the House that in seeking to cut the deficit you cannot afford to spend money on social care. There are sources of finance that could be available to government—any Government, including mine, which could and perhaps should have done this as well so I am not making a partisan point—which would adequately fund the Dilnot proposals on pension tax relief, about which some of us know something and others know relatively little. I may be in the second group.
At the moment pension tax relief is £30 billion and the difference between the standard rate and the higher rate is £7 billion. In the past we weaned the country off mortgage tax relief, first by bringing it down from higher rate to standard rate—that was done by a Conservative Government; the noble Lord, Lord Lamont, I think, but it may have been the noble Lord, Lord Lawson—and subsequently it was abolished altogether. The point about this is that in all our thinking about funding people’s long-term savings and their ability to cope with long-term care and so on, we think there is something called work and something called retirement, and that you should save from the one and transfer it to the other. We have to start thinking much more about people’s longevity, which is a good sign, and moving money from work to early retirement and from early retirement to later retirement; there are three categories.
If you were to ring-fence the money that is currently spent on higher rate tax relief down to lower rate tax relief, which is enjoyed by higher rate taxpayers on their way in, even though they pay only lower rate tax on the way out, it would be redistributed within the pensioner community from younger pensioners in their 60s and 70s to that same group of pensioners as they age into their 80s and 90s. For what it is worth, it would also redistribute, to some degree, from the better off to the poorer. As far as I am concerned, it would hit every winning duck that we want to hit: we would make pension tax relief fair; we would redistribute within the pension community in a ring-fenced way; we would redistribute from the better off to the poorer; and we would, I am sure, be able to commend it to the public in terms of fairness, because most people will be postponing income they might have got in their 60s and 70s to be able to have it in their 80s and 90s.
Before the Minister says that we cannot possibly do anything about this given the deficit—and I realise that this is for HMRC and the Chief Secretary and so on to think about—I would like to put this into play because I would be very sorry indeed if the proposal coming out next week was put into the long grass on the grounds that there can be no funding available and therefore we have to struggle on from an interim ad hoc base, as we are doing at the moment. There is a way if there is political will, and I am quite sure it is the sort of proposition that could command support right around the House and from all political parties. It would be fair, decent and affordable and it would give people security.
Local Government Finance Bill
Lord Best Excerpts(12 years, 5 months ago)
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Lord Jenkin of Roding
Surprise, surprise, but there we are. Discussing this with the Local Government Association, it seemed to me that there would be merit in building in some form of escalator. Amendment 12 in this group introduces a limit, as it were, to say that it cannot be less than the previous year. However, that only stops it going down. Amendments 21 and 22, in the names of my noble friends and me, seek to build in a regular process by which the centralised share falls and the localised share rises. I do not for one moment claim that this is the only way of achieving an escalator; obviously, there might be a whole range of different options to do that. With these amendments we are arguing for the principle that the local authorities should be able to look forward over the next few years to a steadily rising proportion, both to increase the incentive to encourage development and more jobs, and to give expression to the increased localism which the Government aim to champion.
Amendment 22 spells out our proposal. I have said that I do not think this is necessarily the only way of doing it, but the proposal is quite simple: one starts at 50%; two years later the central share declines to 45%; two years after that to 40%; and two years after that to 35%. This takes us only up to 2018, and of course one is hopefully looking further forward than that. The corresponding local shares would go from 50% to 55% two years later; then to 60%; and then up to 65%. Therefore, over the period up to 2018, we would move from 50:50 to 65:35. Perhaps we could write this, or something like it, into the Bill. I made it absolutely clear that there are a number of different options for doing this and this was the one that seemed to attract some support in the local authority world. Local authorities particularly want to see some legislative provision setting out that the 50:50 split is not to be permanent or long-term.
As I have made clear—and this is very different from what I said when I was Secretary of State for the Environment in charge of local authorities—I am a huge supporter of the principle of localism. The noble Lord, Lord McKenzie, and others have made the same point. However, I detect the hand of the Treasury in this wish to maintain a 50% share. There is a feeling that it does not want to let go. My noble friend Lord Brooke of Sutton Mandeville and I have both been Treasury Ministers—I was the Chief Secretary at the Treasury—and I recognise that temptation. It seems to me that we have a choice here. Are we really going to encourage an increase in localisation or are we going to maintain a strong central control with some modest shift in favour of localism?
In considering the Bill and this particular proposal for the division of the business rate retention scheme, I hope that the Government will be prepared to accept that their good faith and belief in the principle of localism and localisation would be demonstrated by writing something like this into the Bill. That is what we are looking for. It would give an enormous fillip to the encouragement of local government which would go the whole way back, and local government would come to be seen as a more important area of governance in this country.
There is no doubt that as, over the past 30 or 40 years, the public have seen local government decision-making increasingly being taken over by central government, there has been a great loss of public interest in and concern over lower and lower voting figures. It is to the huge credit of local councillors such as the noble Lord, Lord Smith of Leigh, and others who are here that they have kept the flag flying in these difficult times. We now have a change of direction and I think that this has given local government an enormous boost of encouragement. It can say, “We really do still count. We are still looked to as an important area of government and not just as an instrument of central government”.
To my mind, if we could build into the Bill some form of escalator so that over the next few years there could be seen to be a shift in the percentage from a 50:50 towards a 65:35 split, or whatever it might be in six or seven years’ time, that would send out a very important signal to local government that the national Government are on its side and that they want to make localism work and make it a greater reality. The advantage would be that it would increase local authorities’ incentive to encourage development and so achieve growth and jobs.
If that is not done, it will give the impression that the Government—the Treasury would carry the blame—are giving a higher priority to tight monetary control than to encouraging growth. There has been a huge amount of argument about that over the past year or two but here is one way in which we can fight back on it. I hope that we will be able to persuade my noble friend on this. She will no doubt wish to discuss it not only with her colleagues in the DCLG but with Treasury Ministers—I know that they have a lot of other things on their plate at the moment—to see whether we can do something along these lines. It would be a hugely important signal to send out and a great encouragement to local authorities, as I hope that noble Lords will agree.
Lord Best
My Lords, I would like to speak to Amendment 16, which comes before the amendments in the name of the noble Lord, Lord Jenkin. I declare my interest as president of the Local Government Association. I express thanks to my various vice-presidents, particularly to the noble Lord, Lord Jenkin, for an exposition in very eloquent terms on the point covered by my rather cruder Amendment 16.
The LGA, representing district, metropolitan and county councils of all political hues, as the noble Lord has said, has expressed disquiet that there is to be a division of the business rates that retain so much central control, despite the positive rhetoric of localism. The LGA recognises that central government wants to keep a firm hand on local government finances during the period of deficit reduction covered by the current spending review, not least to impress the international financial markets that deficit reduction is being taken very seriously. The measures in the Bill are likely to last well beyond that deficit reduction timescale and local government at large is keen to ensure that the retention by central government of 50% of all business rates revenues, and indeed 50% of any business rate growth, shall not be maintained after its purpose has been fulfilled.
This amendment calls for central government to discontinue its retention of a share in local government business rates revenue after 2014-15; that is, after the last financial year in the current spending review period. I recognise that the Government may well be keen to extend the period a little longer because their deficit reduction objectives are likely to go on beyond 2015. However, the LGA, London Councils and others representing local government all agree that that top-slicing of business rates revenues by central government needs some clear end date. The 50% top-slicing greatly restrains the ability of local government to benefit fully from its support for any business rate growth and undermines the localism agenda of devolving powers away from the Secretary of State to local government.
In responding, perhaps the Minister could address one aspect of this concept of a central share of all business rates. I know that the Government have stated their intention to return the revenues that they receive through this arrangement to local government. That certainly sounds as though the Government’s intentions are not to redirect resources away from local spending, but it is unclear how the funding received by the Government will be returned to local authorities and what conditions are likely to be attached to it. Clarification on just how that somewhat circular movement of finance will operate would be much appreciated. The underlying point of the amendment is to draw out the Government’s view on just how long this central government control over half the business rates should last. I entirely support the comments on that from the noble Lord, Lord Jenkin.
Lord Tope
My Lords, my noble friends and I have added our names to Amendments 12, 16, 17, 21 and 22, which have been very ably spoken to by the noble Lords, Lord Jenkin and Lord Best. I shall not repeat all that they said; suffice it to say that I agree with everything that they said. The noble Lord, Lord Jenkin, made some mention of the disappointment in local government when the 50:50 split was announced. That was profound perhaps because local government was expecting more, given the rhetoric from the Government when the so-called repatriation of the business rate was first announced, something for which all parties in local government have strived ever since my noble friend Lord Jenkin nationalised it some years ago. So there was an expectation. He has repented many times since then—and blessed is the sinner.
“(2) In Schedule 8 to the LGFA 1988, after paragraph 5(7) insert—
“( ) Appropriate rateable values will exclude a percentage of any increase in total rateable value of all appropriate hereditaments within the billing authority area as laid down by the Secretary of State in regulations.
( ) In setting the percentage, the Secretary of State must take into account the indexed rate of increases in rateable value of all hereditaments of all billing authority areas.””
Lord Best
My Lords, if the wording of Amendment 15 is pretty incomprehensible to most of your Lordships, I assure the Committee that I, too, found it extremely hard to follow. Indeed, officials at the DCLG have suggested that it should refer to Schedule 7 to the Local Government Finance Act 1988 and not Schedule 8, and they may well be right. However, I am anxious not to get bogged down in the incredibly complex intricacies of the Bill’s wording. Instead, I hope that this amendment will open up the debate on one important issue within the Bill.
The point of disagreement that the amendment addresses relates not to any difference on policy but to a divergence on the best way of implementing that policy. It is a difference between the clever people inside central government departments who devised the Bill’s clauses and the clever people inside local government who spot practical deficiencies therein. With this amendment, I think that all concerned are in agreement on the policy objective: that new arrangements should enhance incentives to local government to be more business-friendly and to increase the commercial viability and the wealth generation of the areas they serve. However, those drafting the Bill may not have chosen a route in this so-called fiendishly complex mechanism that achieves the desired goal in at least one important respect.
The problem is that the legislation would see councils rewarded from an increase in business rates that follows from physical growth in the authority’s tax base—that is, an increase in rateable floor space—but not from increases in the rateable value of existing properties. That means that there is an incentive for councils to go for the building of new offices or for larger-scale, out-of-town developments, but there are no incentives for councils to enhance the rateable value of existing buildings—for example, by spending money on the public realm, transport and community safety, attracting more businesses and more customers and users of services to the area. In heavily developed city locations, there may be few opportunities for creating lots of new buildings, leaving aside the kind of intensification that buildings such as the Shard can create. However, councils can be hugely important in improving the environment and the quality of an area, which leads to greater attractiveness to businesses and thence to higher business rates.
As I read the briefings, I am left with the thought that excluding business rate growth that comes from rental price increases at revaluation is simply an omission in the Bill. All of us would want to encourage councils to pursue economic growth policies that attract new businesses that result in such rises in rental values. Clearly, it can take a lot more effort on the part of a council to organise the upgrading of the business district, spending money on green spaces, on transport links, on improving appearance and on enhancing safety and security than simply granting planning consent for an edge-of-town, traffic-generating, environmentally unfriendly shopping centre; yet the former would provide no benefit to the local authority in terms of a share of the uplift in business rates while the Bill incentivises the latter.
I have had a look at several reports that have been sent to me, starting with a useful one from the Centre for Cities think tank, which was published in February. It makes the case for rewarding revaluation of growth because in some areas physical growth is just not where the focus should be if the end goal is growth and jobs. It identifies two types of area in particular—high-density restricted supply areas such as Westminster or Camden and slower growth or right-sizing areas such as Preston and Chatham. It also includes data demonstrating that, in 2007-08, 50% of authorities saw a reduction in rateable floor space, which the authors put down to a reduction in manufacturing, factories and so forth.
London Councils produced a report last year that included a graph detailing the physical expansion and decline of local authorities’ business rate tax base. The overall position for London was a net loss of properties. Some 14 out of 33 London boroughs actually saw an average decline during the period and, of those that achieved reasonable physical growth, the effects of the Westfield development in Shepherd’s Bush and terminal 5 opening at Heathrow had a large positive effect on the two boroughs concerned: Hammersmith and Fulham and Hillingdon respectively.
Then there was a report from the London Chamber of Commerce called Driving Local Growth, which detailed the results of a survey it carried out asking London businesses for the most important areas for prioritisation by local authorities. Interestingly, the result was not that businesses were keenest on planning considerations being improved but that infrastructure was top of their list, improving community safety and the public realm. Those were registered as most important by local businesses.
I know that this is a somewhat London-centric case, but many other towns and cities will also be seeing little physical growth in business premises but real opportunities to make what already exists more profitable for their areas. A system that incentivises councils only to promote physical growth seems to miss the point and is certainly not an environmentally sustainable approach.
It would be helpful if the Minister could take this away and satisfy herself that the Bill has not unwittingly erred in this regard and that an amendment along these lines would not be in everyone’s interest. I note that prior to the last general election the Conservative Party published a report about the business increase bonus, calling for the measures that would incentivise councils to promote economic growth and support businesses by ensuring that authorities directly benefit from enhancing local commercial environments. If the amendment that I propose is defective in that regard, other amendments are proposed by those with a deep understanding of these matters from within local government. I hope that the Minister will accept in principle that this issue is worth pursuing.
Baroness Hanham
I did have to look over my shoulder for that one and I am told that it is an improvement against physical growth, but I will write a bit further to the noble Baroness.
Lord Best
My Lords, I am grateful to the noble Lords who supported this difficult but fundamentally important amendment. I thank the noble Lord, Lord Palmer, and the noble Earl, Lord Lytton. Perhaps I might respond briefly to the noble Lord, Lord Beecham, by saying that the objections he raises—first, that some places would get a windfall and might not deserve it and, secondly, that some places will see a fall in rental values and therefore of rateable values and income—did not strike me as undermining the case here. Major infrastructure projects require people to buy into them; to accept that Crossrail will come through town, or whatever the big issue is. It helps if there is some financial return to that area for the inconvenience that can elapse, perhaps for several years, when major infrastructure projects come through. However, this amendment is not of course specifically addressing that but addressing the upgrading of a particular part of town by the efforts of the local authority. That is the principal objective.
In relation to the noble Lord’s second point, that some areas may see a fall in values—that factories may close and nothing may happen—this amendment is intended to provide local authorities with a greater incentive to prevent that and to do something about it. If the council makes the area much better for customers to come to and for offices to recruit staff to work there, and if it does some good for the area, that is surely good for the local economy and can revive and regenerate a place. However, if councils have absolutely no incentive to spend that money in times of difficult resource allocation for them, it would seem most unlikely that local authorities would put their backs into trying to drive some business improvement and growth in those places. It strikes me that this amendment still has some heart to it. The technicalities have completely escaped me along the way and I would be very grateful if I could take up the Minister’s offer to explore whether or not her response was helpful.
Lord Beecham
Perhaps the Minister would also like to consider that question. I come back to the point that the noble Lord, Lord Best, has just made. I have a fair amount of experience in this area of regeneration. When I was leader of my city council, we had two quite different propositions. The first was, initially, to start developing along the riverside in Newcastle and to take advantage of the then Conservative Government’s enterprise zone. It was developed as a business park and we helped an engineering company, Michell Bearings, to move into a new factory. That factory was modern and all the rest of it but, 20-odd years later, it has closed. There is nothing much we can do to get it reopened. It is in an enterprise zone and has that attraction, for what it is worth. It is close to a bypass, which we would like the Highways Agency to do something about but cannot.
Against that, when we were faced with another aspect of enterprise zones, the development of an out-of-town shopping centre, we worked very closely with local business to promote the existing shopping core in Newcastle, just as other authorities did when faced with similar problems. That is one case where we can and did do something by responding to a downward pressure on business. In the other case of the closure of that factory, and indeed of another which we had always supported in another part of town, there is very little we can do. That, it seems, is the dilemma: we could find by accident or design that a substantial benefit is going to areas which have contributed nothing in the way of policy at all, let alone investment, towards the creation of value which they will get not just in the form of a 50% share of the rates that accrue but as the full amount. That is the point. Subject to the tariffs and all the rest of it, there is to be a retention, is there not, of the growth in business rate and not just the core rate. That could be quite accidental, and the product of other people’s decisions to which the local authority may have made no contribution at all. The consequence in the system as a whole is that it could widen disadvantage between one area and another. That is the point that we need to explore further. I have said enough and I leave it at that.
The Earl of Lytton
My Lords, I am thinking about the current process of recording hereditaments, as they are known, in the local rating lists. I call to mind that as a result of the riots last year, one or more commercial premises were totally destroyed. As I understand it, there is a vacant site awaiting redevelopment that is described as a shop and premises, and it is in the list at £1. The Prime Minister had in fact said in the wake of the riots that properties with damage would be taken out of assessment altogether. Now, there is a little wrinkle here. If a site remains in the assessment, effectively as a cleared site, but is still called a shop and premises or a department store and premises, or whatever it was, at a £1 rateable value then it is still in the list. When it comes back into the list again as a refurbished property, it will be at whatever the level is of the new premises. If it was a redevelopment process—not riot damage or anything like that—in which the local authority was a key player, the question is whether it stands to be disenfranchised because the hereditament has not been taken out of the list altogether and is not therefore really a new entry in the list. It is a revaluation of an existing one.
This might be looking for trouble where there is none, but I want to be very careful. As I made clear both in the debate on the Queen’s Speech and at Second Reading of this Bill, there are a number of little wrinkles creeping in because of the way in which Treasury policy now appears to influence the work of the Valuation Office Agency in handling the entries in the valuation list. I want to be absolutely sure that by dint of this business of not taking things out of assessment when in fact they probably should be, we are not going to find that we have disenfranchised the authority from that gain in rateable value, which is undoubtedly the work of its own hands.
Lord Brooke of Sutton Mandeville
I realise that the noble Lord is about to ask permission to withdraw his amendment, but I could see that the Minister and her counsellors were engaged in conversation. If I just add a couple of sentences, it might enable the Minister to conclude her conversation, though I am not in any sense imposing on her.
If this is the last opportunity to give advice to the noble Lord, Lord Best, before his private conversation with the Minister, let me say something in the context of Crossrail, which has been used as an example and which had major constituency implications for me. On Crossrail mark 1, there was massive residential blight involved, about which I am happy to talk to the noble Lord, Lord Best. In the case of Crossrail mark 2, the Corporation of London was deeply involved in the terms that actually enabled the project to take place at all.
Baroness Hanham
My Lords, the noble Lord, Lord Brooke, gave me an opportunity to respond, which I am not going to take.
Localism Bill
Lord Best Excerpts(13 years, 2 months ago)
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Lord Greaves
My Lords, that reminds me of a song about digging a hole, but perhaps we should not go into it. In Committee, I attempted to search for a compromise on this and to help the Government to clarify what they were saying. I spend a lot of time trying to do that on Bills. The Government should be congratulated on and thanked for the huge amount of time and effort that was put in by Ministers and their civil servants in the Bill team, and by their ministerial colleagues in the House of Commons, to try to sort out a bit of a mess—perhaps more than a bit of a mess—that has resulted from what some of us would say was the rather hasty addition of this clause at the end of the procedures in the House of Commons. They made a huge effort, and I have no doubt that the amendment moved by the noble Earl is an improvement. It helps a bit. My noble friend says that it takes him further into a hole, but I am not sure that that is the case; it probably keeps his head above water. However, it is our clear view after reflection throughout the summer that far and away the best thing to do would be to remove the clause altogether. That is why I support the amendment eloquently spoken to by my noble friend Lady Parminter.
I want to make a couple of points—and one point in slight jest, which I will make now. My noble friend Lord Attlee said that one argument for accepting that this clause should remain is that it does no harm. I must say that I am so used to Governments telling us that amendments that we put forward may not do any harm but are not necessary that I think the boot is on the other foot now. Every time I move an amendment, while the noble Lord is taking the clause for the Government I will look forward to reminding him that my amendment does no harm and therefore should be passed with acclamation.
I would like to make two serious points. There is a very clear difference between CIL and Section 106, for example, which are themselves tied to an application and cannot be untied in any way, and the new homes bonus, which is not tied to a particular application and can be tied, as I think my noble Friend, Lord Attlee, said, only by a clear decision, a resolution presumably, of the council that will receive the new homes bonus. That is the real difference. The noble Earl said quite clearly that it can be taken into account only if it is tied to the application by the receiving council.
I have been thinking about this. In a possible case study, which may happen more often than people might imagine, a big development may result in a lot of new homes bonus and a significant amount of money coming to that council. The use of that money might be politically controversial and contested within the council. In advance of that money coming, the council, the executive, the cabinet, or whoever it is that makes decisions about its allocation, might corporately pass a resolution that makes it quite clear that when it comes, and if planning permission is given, the money will be tied to a project linked to that development. However, it is controversial and the opposition on the council does not agree to it and campaigns against it. Then there are some elections and the opposition wins them, and this large amount of money is taken out of that project and put somewhere else. Once a planning decision is made and issued, that is it; it cannot be revisited by the council. However, decisions about how to allocate money can be revisited whenever the council wants to revisit them. What happens if the development is clearly given on the basis, say, of flood damage or a new swimming pool in the middle of the estate that is linked to that development, and planning permission is passed and the council later changes its decision about how to use that money? They might have a huge budget crisis. Perish the thought that any council has a huge budget crisis nowadays, but if does have a huge budget crisis, the council may find that it simply has to put this money into the general fund in order to keep its head above water. It is quite clear that that could happen. What is the legal position? I do not believe that anybody can do anything about it, except that that planning permission will have been given on false pretences.
Lord Best
My Lords, I think the government amendment does something helpful. Councillors on planning committees have to face the accusation, if they are not careful, that they are selling planning consents, that they are just doing it for the money. There is ambivalence as to whether they can take on board the fact that it is surely important to consider that the local community may benefit financially from what happens if the development goes ahead.
The Minister has clarified the circumstances in which it is entirely legitimate for the planning committee to say, “Yes, we have taken on board the fact that there are financial gains for the locality as a result of this. It is not the only thing we take into account. It has no greater weight than the other material considerations. The fact that local people are going to benefit from this”—as the noble Earl made so clear—“can be taken into account, but don’t let anybody accuse us, the planning committee, of just doing it for the money. We’re doing something that is legitimate”, as this clause makes clear. I think it can be quite helpful.
Lord McKenzie of Luton
My Lords, I speak in support of Amendment 223D to leave out Clause 130 and in support of the noble Baronesses, Lady Parminter and Lady Hamwee, my noble friend Lord Howarth and the noble Lord, Lord Greaves. To argue that these amendments are unnecessary and that this clause is necessary because it addresses the issue of confusion seems to be turning the matter on its head. We know there is confusion because the clause exists. The noble Baroness, Lady Parminter, said that it takes something to get the CPRE, the TCPA and the RTPI in the same position and all very concerned about this. They do not arrive at spurious conclusions. They have impressed on us and all noble Lords their real concerns about the impact of these provisions.
The noble Lord, Lord Best, said that the provision helps councillors understand what they can and cannot do. The Government’s basic proposition in this is that the clause does not change the law. If the clause does not change the law, why have it? The proposition that noble Lords, particularly the noble Lord, Lord Greaves, referred to—that it does no harm—is an extremely spurious basis on which to legislate, particularly in such an important area. I accept that the Minister made some effort to differentiate situations where material considerations—local financial considerations—can legitimately be taken into account from those where they cannot, but that analysis does not depend upon the clause and the amendments before us but upon the law as it currently is. Are we not much better off leaving the law as it currently is rather than introducing something that does not, with great respect, clarify matters but adds to the confusion?
The very existence of the clause, amended or not, has caused great controversy. What changes the existing position? How does the new homes bonus or CIL change, from the Government’s point of view, and to what extent can it be taken into account as a material consideration? As I understand it from the Minister, nothing changes. All it does is describe the law as it is. If that description is the cause of confusion and uncertainty, surely we are better off without it. It seems a very straightforward proposition. It seems to me that the onus should be on those seeking to introduce and sustain the clause as amended to explain why. To say that it does no harm is a totally inadequate justification for a provision that is causing great consternation among many people involved in planning, who are experts and who have been in the field for a very long time. I urge the Government to reconsider this matter. If the only justification for the clause is that it will help to deal with uncertainty, I hope the Minister will accept just from the discussion tonight that in many quarters it clearly does not and that we are better off without it.
“Town and village green legislation
(1) Regulations may make provision relating to powers for registration authorities to decline to accept proposals under section 15 of the Commons Act 2006.
(2) The regulations may in particular make provision—
(a) dealing with any case of proposals submitted under section 15 of the Commons Act 2006 where in the view of the registration authority insufficient evidence has been submitted or there is strong evidence that the application could not meet the criteria for registration; and(b) dealing with costs incurred by the registration authority in amending or dismissing the application in cases of frivolous or vexatious proposals.(3) Regulations may make provision relating to powers for registration authorities to reject proposals accepted under section 15 of the Commons Act 2006.
(4) The regulations may in particular make provision—
(a) dealing with any case of proposals accepted under section 15 of the Commons Act 2006 and which are subsequently deemed in the view of the registration authority to be frivolous or vexatious;(b) as to the award of costs to relevant parties and as to the parties by whom the costs are to be made.(5) In subsection (4), an application is “frivolous or vexatious” if it discloses no reasonable grounds for the application or is otherwise an abuse of process.
(6) Section 15(4) of the Commons Act 2006 does not apply in relation to any land where there is an extant planning permission in respect of the whole or any part of the land for the life of the permission.”
Lord Best
My Lords, I shall be brief as we had an interesting debate on this issue in Committee. Amendment 232 relates to vexatious town and village green applications. There is a widespread view that, under the Commons Act 2006, the measure allowing areas that had been used for sporting, leisure and recreational use to be declared village greens and never to be built on, a status that would last in perpetuity, was being abused and being used as a pretext for stalling and blocking developments that in other terms would have succeeded. It is a very cheap way to stop anything happening. It costs those who do it very little. I quoted the example of the 50 acre site for which I was responsible on the edge of York, which was held up for a considerable period of time because someone was deemed to have walked their dog on the site for 20 years. I think that the dog was changed somewhere along the way. Even if the application fails, this can inflict a great deal of damage, delay matters and cause a lot of expense.
As I understand it, the Government are seized of all this, for which I am very pleased, and consultation is under way to see what might be done. The problem is that this consultation exercise concludes that action should be taken to prevent vexatious applications of this kind. As my amendment suggests, local authorities should have the power to turn down applications that they deem to be frivolous or vexatious, but that the Government will come to that conclusion at the end of a consultation period after the Bill has completed its passage through Parliament. There will be no opportunity until the next legislation comes along—in I do not know how many years—to set this one straight.
I ask the noble Earl on the Front Bench to let us know what the Government are expected to be able to do through regulations or other methods so that we do not find ourselves in the bind that without any legislative amendment nothing can happen, even though all are agreed that it should. I beg to move.
Lord Greaves
My Lords, because of the time of night, I shall make a couple of statements rather than explain them. This is not the right Bill or the time to do this. It probably does not require any amendment to Section 15 of the Commons Act. It can be dealt with in two ways: first, local authorities can pull their fingers out and not be unnecessarily legalistic and bureaucratic, which in my experience they have been; and, secondly, by tweaking secondary legislation. It is not necessary to do it here. The problem can be solved in a much more efficient way in secondary legislation through Defra.
Earl Attlee
My Lords, I am grateful to the noble Lord, Lord Best, for moving his amendment again as the matter has moved on a little. Amendment 232 would provide regulation-making powers to allow commons registration authorities to decline new greens applications if there was insufficient evidence that they could meet the necessary criteria, or if they were frivolous or vexatious, and to award costs. It would also prevent applications for the registration of land on which use for sports and pastimes ceased before 6 April 2007 if the land was subject to planning permission.
The Government share the concerns lying behind the amendment about the way in which the new greens registration system is being used in some cases to hinder legitimate development. I said in Committee on 14 July that the Government hoped to make an announcement on town and village greens shortly. On 25 July, we published a consultation document proposing reforms to the new town and village greens registration system. Coincidentally, that consultation closes this evening.
The noble Lord, Lord Best, asked what can be done through regulation. Through regulation, we can consider streamlining the process for registering greens and setting the fees. The consultation includes a proposal to rule out applications for land which is subject to a planning application or planning permission. This would address the purpose of subsection (5) of the amendment. It also includes a proposal to rule out applications for land which has been identified for development or protected by the local green spaces designation in a local or neighbourhood plan. There is also a proposal to introduce fees for applications.
Commons registration authorities already have the power to reject new town and village green applications that are incomplete or lack the requisite evidence for registration. However, a specific power to deal expeditiously with such matters will provide an increased level of confidence to authorities. For that reason, we have proposed to streamline the sifting process. My noble friend Lady Byford and the noble Lord know that we are still consulting on our proposed reforms, though the deadline fast approaches—in fact, it is tonight. I am sure that they will appreciate how those who have responded to the consultation would feel if we were to legislate now in the manner suggested, without, it would seem, hearing their views on the options we have set out.
I have made it clear that the Government share the concerns of my noble friend and the noble Lord. As the Minister for the Natural Environment and Fisheries said in his introduction to the Government’s consultation, we plan to announce our conclusions early in the new year. We will want to work with my noble friend, the noble Lord, Lord Best, and with others with an interest in taking these conclusions forward. In the mean time, I would prefer not to second-guess what those conclusions will be without having first carefully digested the response to the consultation.
Lord Best
My Lords, I think there is some helpful material within that. There are still 58 minutes in which people can give their responses to the consultation document. I am grateful for that response. We will be able to look at it at our leisure. I beg leave to withdraw the amendment.
Localism Bill
Lord Best Excerpts(13 years, 2 months ago)
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“Revision of local development documents
In section 26 of the Planning and Compulsory Purchase Act 2004 (revision of local development documents), after subsection (7) insert—“(8) Within an interim period after the occurrence of a relevant event, the authority must review every local development document in the light of that event.
(9) If the authority finds that any modifications of the document are required as a consequence of the review they must prepare a revised document containing those modifications.
(10) The following are relevant events—
(a) issuing any consolidated guidance to which a local planning authority must have regard under section 19(2);(b) the coming into effect of the abolition of regional strategies under section 97 of the Localism Act 2011.(11) During this interim period, local development documents adopted under section 23 shall be regarded by the Secretary of State as being in general conformity with consolidated guidance as referred to in section 26(10)(a).
(12) The Secretary of State may by regulations make provision in connection with the exercise by any person of functions under this section.
(13) Regulations made under subsection (11) may, in particular, make provision as to an expedited procedure including—
(a) requirements for giving appropriate notice and publicity to any document made under this section;(b) requirements for the appropriate inspection by the public of any document made under this section;(c) the nature and extent of appropriate consultation with and participation by the public in any document made under this section;(d) the making of appropriate representations about any document made under this section;(e) the appropriate procedures to be adopted for the consideration of any such representations.(14) Regulations made under subsection (11) may, in particular, make provision as to—
(a) the determination of when the interim period in this section may cease, at least three years after the coming into force of this section;(b) the completion of any local development plan documents not adopted under section 23 within the interim period.””
Lord Best
My Lords, we are on the planning parts of the Localism Bill and my amendment addresses the transitional period between the old system and the new. The old planning system had regions, regional spatial strategies and many planning policy statements; the new arrangements have no regions, no regional spatial strategies and, instead of planning policy statements, one national planning policy framework, with its special ingredient of a presumption in favour of development. We have discussed this a great deal over recent days. There was a wonderful speech from the noble Lord, Lord Deben, in the previous session on the Localism Bill, in the debate led by the noble Lord, Lord Rooker, who also made a wonderful speech. My position on that issue is on the side of the Government and not on the side of the National Trust and the CPRE. However, we are not going into that today but will look at the transitional period between the old planning system and the new.
In Committee, I brought forward an amendment to deal with those aspects of the local development frameworks used by local authorities that made reference to regional spatial strategies that are no more. The problem I was addressing with that amendment was that, without the regional spatial strategy to which the local development frameworks referred, the validity of the whole local development framework was called into question. My amendment sought to allow local authorities, even though there was no continuing regional spatial strategy, to continue to operate as if there had been in respect of those pieces of the regional spatial strategy that they had transmitted into their own local development framework.
For example, Woking Council had important policy decisions in its framework that related to sustainability in Woking. However, it did not put them into its own local development framework but referred to the south-east of England plan which covered those points for it. Under the new regime there is no longer a south-east plan, and Woking Council’s own local plan becomes invalid. At that stage in Committee we found ourselves with a need for my amendment because of the gap between the old system and the new, which it was suggested we could remedy by allowing a continuation of the reference to the regional spatial strategy. That amendment received short shrift from the Government at the time and I felt that it had not been fully appreciated when we discussed it. I was going to bring it back last week but it was bounced by an earlier government amendment which, by pre-emption, meant that mine could not be taken.
However, I have now brought forward Amendment 204EA, which looks at the question of the interregnum between the old system and the new system which includes the presumption of development provided projects accord with the necessary sustainability requirements. It has been said that all the existing local development framework plans and all the existing plans in the pipeline will become invalid and have to go back to square one—that they will all require evidence to be heard in public, extensive consultation, the use of an inspector and about a year’s delay before anything can happen, unless we can have in that interregnum a fast-track, speeded-up process to expedite the approval of local development frameworks and local plans.
There is widespread anxiety that if we do not fill this gap there will be a free-for-all, with planners able to lean on the fact that there is a presumption in favour of development and to come out with all kinds of unsuitable developments. I am not saying whether or not I believe that to be true, but there is a widely held view that there will be great difficulty if councils do not have time to settle into the new system and there are not arrangements in place. The procedures for that are set out in my amendment to carry us forward from the old to the new.
Baroness Hanham
Discussions are going on with the Planning Inspectorate at the moment to see what is required to make the examination process quicker. Under the new way of working, local authorities will be able to have single areas examined one at a time instead of the whole policy having to be dealt with. It is well understood that the Planning Inspectorate will be put under pressure and we hope and expect that that will be able to be worked around.
I have said all that I can say about a transitional period. The transitional arrangements will come about as a result of the consultation on the NPPF. The noble Lord thinks that a set period might be a good idea. However, as I said, with the experience of the previous set period, which does not seem to have put any pressure on local authorities, we would need to consider very carefully whether there is any value in having that.
Lord Best
My Lords, we have clearly come a long way since the Committee stage of the Bill and I am very grateful to Members of the House from all sides, who were extremely supportive of these measures to cover this transitional period.
The noble Lord, Lord Greaves, was right in expecting that the best we could hope for was not something in the Bill, but some firm guidance. I fully appreciate that the consultation period finishes only today. Therefore mulling over what others have said and taking it into account may take a little time. However, it would be very helpful before we get to Third Reading if the Minister were able to share her thoughts and put a bit more flesh on the bones of how these transitional arrangements may work. In particular, as the noble Lord, Lord Greaves, has said, perhaps she could give us a little more specificity—if I have got that right—and be a little more definite on the timescales that local authorities will be expected to adopt—indeed, timescales that are reasonable in the circumstances and allow sensible things to happen.
I must acknowledge a very helpful meeting with Greg Clark down the other end. I am expecting the outcome of this to be positive and helpful, even if it comes in the form of guidance and is not in the Bill. Perhaps I may reserve the right to bring this back at Third Reading if by that stage we find that very little progress—I do not think that that will happen—has been made. At this stage, I beg leave to withdraw the amendment.
“(4) A local planning authority must make a neighbourhood development plan or order unless—
(a) one or more of the relevant ward members expresses disagreement;(b) the local planning authority receives a petition signed by a minimum of 5% of voters in the areas covered by the plan or order; or(c) the local authority thinks it expedient to hold a referendum.”
Lord Best
My Lords, I will also speak to Amendments 208 to 210. These amendments are about the referenda for approving and adopting the neighbourhood plans. One of the major changes to the Localism Bill has been the extensive change to the requirements for referenda with the removal of Chapter 1 from Part 4, but neighbourhood plans are still subject to referenda.
I understand that if local people are at loggerheads with their local authority but feel very strongly that their particular neighbourhood plans should proceed, it is no doubt necessary before imposing the plan on everybody else to find out what the whole community thinks of it. However, if the local authority accepts the neighbourhood plan, and it is acceptable to the parish council or the town council, there is no real democratic deficit. A number of elected politicians are involved, and where everyone at the local level, the local authority level and the parish level thinks it is a good idea, it does not seem very wise to proceed with a referendum that brings in people who have had very little to do with working through the neighbourhood plan.
The Government are setting up 126 front runners, as they call them, with some funding to see how things work. I have seen one of these and talked to the group that is bringing forward its neighbourhood plan. The group is in the parish of the Cerne valley, north of Dorchester in Dorset, and it is doing great things. I strongly approve of the idea of people in the neighbourhood working out a plan for their area. This is all about a culture change. Instead of everybody being against development, people are thinking through the fact that there has to be some development and deciding where it is best sited. People reject some of the sites the house builders might have liked but bring on stream others and bring together their plan.
There are lots of difficulties, hassle and arguments at the local level, but I say good for them. Finally, at the end of a long and tortuous business, I am sure they will have a neighbourhood plan and it will be agreed with the parish council. If the local authority, the district council in this case, says that that is fine, for goodness sake let us not put this out to a referendum that brings in all kinds of people who have had absolutely nothing to do with the process and have not come to any of the meetings. It is always so much easier for people to say no to something than to say yes. If you want to keep your head below the parapet you do not say you are in favour, you stay at home. The people who get up the petition and want to say no are very glad to put their heads above the parapet and will bring out some votes. I fear that an awful lot of hard work in the Cerne valley, or wherever it may, can be lost when, as I said, all kinds of people who have had little to do with the process turn out for a referendum.
My amendment contains a couple of safeguards. I have to admit that I am having second thoughts about my own safeguards. I am just about to talk against my own amendment at this point. However, fearing that it might be unacceptable not to keep the referendum ingredient in the Bill, I have included two ways in which a referendum would legally be required. One would be a petition is signed by 5 per cent of villagers who say that they want to have a proper referendum in which more than 50 per cent would have to vote in favour of the proposed measure. The amendment suggests that if 5 per cent did that, a referendum would go ahead.
The other safeguard is that if one of the ward councillors—there might be three ward councillors for the parish—was opposed to the idea of the plan being taken forward, a referendum would have to be held. I have talked to people at the local level—I met a number of people in Dorset last Friday—who thought that my amendment was great up to the point where it referred to the 5 per cent petition. I was told that that could comprise 125 people in one of the parishes concerned, who all go to the local shop and sign any petition that is put under their noses. Local people were also not in favour of one recalcitrant councillor who wishes to curry favour—perhaps he is in a different party from the majority in that particular patch—saying that a referendum must be held. They did not think that it was a bright idea for my amendment to include those safeguards.
I should have been emboldened by the comments of the noble Lord, Lord True, who is, indeed, a true believer in localism but who does not see the need for a referendum in circumstances such as I have described. He favours a much more permissive regime involving consultation with local people. I had a very good meeting with Greg Clark during the summer. His view at that point was that if the neighbourhood plan is acceptable to the council and the council agrees to prepare a local development order that embraces the plan—I think the noble Baroness reiterated this today—that can go ahead without the need to go through the rigmarole of a referendum. That is a significant point. In these circumstances it would be enormously helpful if that could be clarified.
The noble Baroness said that she would look again at the amendment in the name of the noble Lord, Lord True. I wonder whether the proposals in my amendment might be wrapped up in his to determine whether there is a way in which we can make it clear to people that once a neighbourhood plan is devised and agreement is reached with a district council, parish council or town council, and everyone is okay with this, a referendum will not be needed. At the moment people’s understanding, fear and anxiety is that a referendum will have to be held in all cases. I am preparing myself for reassurance. I beg to move.
Lord Best
My Lords, I am very grateful for the support of the noble Baroness, Lady Eaton, and the noble Lord, Lord True. I am grateful, too, to the Minister for her clarification.
The distinction that we have been drawing out in the course of our discussions today is between the local authority saying, “The neighbourhood plan is in conformity with the local plan”, and the local authority saying, “Although the neighbourhood plan makes some embellishments and has some bright ideas that the people within the locality wish to see which may change the local plan, nevertheless the local authority is happy with those changes and will issue a local development order that will embrace that neighbourhood plan”. There is a slight distinction between accepting what the neighbourhood plan says and accepting simply that it is in conformity with the local plan. We have gone a little bit further. The local authority may say, “Okay, you didn’t want to use those sites over there that were in our local plan. We fully understand. We are still going to have the housing or whatever it is that is required in the area. They will be in a slightly different place but that is what you have all negotiated and worked through. You have spent 18 months on this hard work and we are prepared to accept that as a local authority”. We have got to the point where that change to the local authority’s original intentions triggered by the neighbourhood plan will be something that does not require a referendum. The local authority accepts it at the neighbourhood level. It is, of course, approved by the parish council neighbourhood forum.
I think that we are more or less there, but I would like to be part of the further negotiations as the Minister considers these matters in detail between now and Third Reading. With that, I beg leave to withdraw the amendment.
Localism Bill
Lord Best Excerpts(13 years, 3 months ago)
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“Proceeds of sale of social housing
(1) In section 11 of the Local Government Act 2003 (duty to determine affordable borrowing limit), omit subsections (2)(b), (3) and (4).
(2) Any regulation made under section 11(2)(b) of the Local Government Act 2003 shall cease to have effect from 1 April 2012.”
Lord Best
My Lords, Amendments 41 and 51 are also about local authorities having greater freedom to organise their housing affairs without constant barriers being put in their way. These amendments concern the restrictions on local authorities that flow from taxing the sales of right-to-buy properties or any other sales of properties by housing authorities at 75 per cent of the money received by the local authority. Housing associations can sell properties, whether under the right to buy that they operate or on the open market where they have a vacant property. They can recycle 100 per cent of their receipts back into housing, to improving their housing stock and to building new homes.
The housing association of which I used to be chief executive, the Joseph Rowntree Housing Trust, had a programme of selling alternative vacant properties on our estates so that we could get a better mix of people of different incomes living in the same community. We could replace every home that we sold because we received 100 per cent of the funds from that sale to recycle into new homes elsewhere. However, local authorities have to pay 75 per cent of their proceeds back to the Treasury. Now that we are in the mode of reforming the housing revenue account, this seems to be the moment at which that restriction should be lifted and local authorities should be liberated to recycle the proceeds from sales.
I understand that the Treasury is very reluctant to forgo the receipts that it currently collects. That perhaps is understandable, because this is serious money that is coming into the Treasury. It has managed to scoop the pool here for many years, and tens of billions of pounds from right-to-buy sales have gone into the Exchequer. I understand that it does not wish to say goodbye to those arrangements. I also understand that in settling the debt in the new self-financing scheme for local authorities, account has been taken of the rental income that people will forgo once a property is sold. Nevertheless, saying goodbye to 75 per cent of the proceeds from right-to-buy sales, in stark contrast with the way housing associations are treated, seems to be an item on which reform at this time would be very significant.
Let me make it clear that it is not only right-to-buy sales that attract a 75 per cent tax—not a tax on the capital gain, but a tax on the sum received—as it is also imposed on the sale of bits of land and properties that are vacant and not subject to the right to buy. Where local authorities, like the Rowntree trust, would like to sell council houses to get a better mix of incomes across an estate, local authorities will not be able to recycle the proceeds from those sales, as they will have to pay 75 per cent to the Treasury. I think that the Treasury will argue again that it would like to see those receipts coming back to it since deficit reduction is top of the list of the Government’s priorities, but the Treasury is not going to receive anything from the sale of properties outside of the right to buy if local authorities know that it is such a bad deal to sell them in order to regenerate an area using the money they raise. No businesslike authority will proceed with these sales in order to pay money to the Treasury as a voluntary act. Local authorities simply will not do it. The Treasury is not going to forgo capital receipts if the 75 per cent tax on councils is lifted for those properties where the right to buy does not exist—in other words, where the council can make a sale voluntarily rather than being compelled to do so, as with the right to buy. I hope that the Government will be able, if deficit reduction in this spending round is so paramount that nothing can be done about the right-to-buy receipts, at least to offer to some extent a reassurance in relation to the sales of other properties that are not subject to the right to buy.
During the summer I have had discussions and correspondence with the Minister, and I hope that she will be able to tell us this afternoon that there may be some change of the Government’s mind about this very severe restriction on local authority activity, one where the ludicrous level of taxation makes it very difficult to run a business. I beg to move.
Lord Beecham
My Lords, the noble Lord referred to the 75 per cent tax levied on the proceeds of right-to-buy sales. It is interesting to note that at the moment there is a good deal of pressure on the Government to abandon the 50 per cent tax charged on those with substantial incomes and that, indeed, at least part of the coalition Government is interested in a mansion tax, which I suspect would be levied at substantially less than 75 per cent. In the context of housing, we should not be thinking in terms of taxation. The nation is paying a very heavy price in terms of housing need for the refusal of Government, initially in the 1980s, to allow any of the proceeds of the sale of council housing to be reinvested in housing and, it must be said, for the somewhat belated and modest change that was made to those rules by the previous Government. It does not seem to make any kind of economic sense.
The money raised by the right to buy would be ploughed back into housing provision. That would have two effects, the first of which would be that it would create assets on the balance sheet; it would not disappear into thin air. Secondly, it would give a much needed boost to the construction industry and therefore to the economy at a time when, as the Chancellor has belatedly conceded, things are not looking good in terms of the projected growth rate. Thirdly, it would lead to employment being taken up and thus a reduction in the cost of paying benefits. Most particularly, I suspect that the result would be that houses would be built rather more quickly than through the hoped-for gains to be made by the proposals in the national policy planning framework, which seem to assume that planning is the reason for the low number of houses being built, whereas of course the key issues are in fact finance and people’s capacity to buy.
Looking at it purely in housing terms, the noble Lord’s amendment makes a great deal of sense. I hope that the Government will rethink their position because it would make an immediate and much more significant contribution to dealing with the housing problem, as well as helping with economic growth without damaging the balance sheet. Indeed, in some respects it would strengthen the balance sheet with assets that are likely to appreciate.
Lord Shutt of Greetland
I might have to think that one through, because I see the contra. On the other hand, there is only one central Government. The problem that we have all along is that some 170 local government entities are involved in housing. At least you know where you are with central government and that £862 million. The position can be entirely different in local government.
I would like to think that there will be a time when this policy is not in place. However, as I indicated, it is no longer the big deal that it was, given that so many former council houses have been sold and the amounts coming in are nothing like they were at their peak, when this Government were not in business.
Lord Best
My Lords, the housing revenue account is often compared to the Schleswig-Holstein question. Of the only three people who understood it, one had committed suicide, one was in a madhouse and one was in a monastery. Following the debate on the housing revenue account today has been a bit like that.
I am very grateful to noble Lords who have spoken on this. The noble Lord, Lord Whitty, made two fundamental points. First, if only we had kept the receipts during the past 30 years, we could have built a lot of houses and renovated a lot more. That money has evaporated. If we could get that changed henceforth, that would be thoroughly commendable. The noble Lord also made the point that if local authorities had been able to sell vacant properties on some of their estates on the open market, they could have introduced people on different incomes and created mixed-tenure estates, which would have been better socially for everyone concerned. However, there is absolutely no reason why local authorities would do that, because they would lose all the money that they received from the sale and could not then replace the home that they had sold. I am very grateful for that intervention and for those of the noble Lords, Lord Beecham and Lord McKenzie.
I shall certainly bank the very important point that in respect of sales outside the right to buy—the voluntary sales by local authorities—the intention is that in future the levy will be lifted. That could be quite a significant change in the future. The leader of the London Borough of Hammersmith & Fulham, Councillor Stephen Greenhalgh, is very much in favour of this. He explained to me that he has properties which, going back to the days of municipalisation, are scattered in some streets and are now in need of substantial repairs or improvements, although they are also very valuable. Rather than spend a great deal of money on some of those properties when they become vacant, it would be much better for Hammersmith & Fulham to sell them on the open market and not spend the money on the repairs. That money would be recycled, getting two or three flats elsewhere for the price received for those properties in Parsons Green or wherever they happened to be in Hammersmith & Fulham. Therefore, the Minister’s concession here may open some opportunities for councils to take in receipts to recycle in a very meaningful way, and I am very grateful for that concession.
In relation to the right to buy, we live to fight another day. For the moment, I beg leave to withdraw the amendment.
Lord Best
My Lords, I, too, support the role of councillors and their engagement in these processes, but I do not think that this is an either/or. My name is against Amendments 69, 71 and 72. If people do not wish to go to the councillor for any reason, surely they should have the opportunity to go directly to the ombudsman service. My interest is that I have been on the receiving end of the ombudsman’s judgment, complaints having been made about organisations that I have chaired and run, and I think the ombudsman service is great. It resolves complaints that have been running sometimes for ages; the filing cabinet is full of going backwards and forwards, the ombudsman sorts it out, the decision is final. It is a professional service. The British and Irish Ombudsman Association thinks that an essential ingredient in any ombudsman service is that the consumer has a right of direct access to that service.
I chair the Council of the Property Ombudsman, which looks after the private sector, separate from the arrangements for the Housing Ombudsman in the social housing sector. In the private sector, of course, tenants can go direct to the ombudsman; they do not have to go to a council, an MP or a tenant panel. That system works extremely well. I have watched the process from both sides of the fence. Ombudsman services really work and direct access to them seems an important ingredient.
We have one example. The noble Lord, Lord Whitty, said he did not think that there were any examples of there being a bureaucratic filter of this kind, but I think the Parliamentary Ombudsman is the last outpost of this approach. It applied to the Local Government Ombudsman but was scrapped as it was found to be unworkable and unnecessary, but with the Parliamentary Ombudsman, going through your MP remains. However, Ann Abraham, the Parliamentary Ombudsman, says:
“The MP filter delays the resolution of complaints by the ombudsman and even deters some people from taking their complaints to the ombudsman at all”.
I think it likely, as a result of the consultation now going on, that the filter will be dropped in that last case of the Parliamentary Ombudsman. So let us by all means engage councillors and encourage people to go to their councillor—sometimes that can be the best kind of mediation and local way of organising things—but let us allow people, if they wish, to go direct to the ombudsman service. It is there as a professional body and it sorts things out.
Lord True
My Lords, I also declare an interest as a local councillor. I must say to the noble Lord, Lord Beecham, that my aged aunt, who has a great fear of spiders, says, “In September and October never talk about a spider, otherwise you will talk one up”, and one invariably comes up. I heard what he said about the contributions of Members on this side to these debates. When he makes such comments, I have to point out that we made very little progress with groups yesterday and there may be some connection—not with the Conservatives but with other Members in the Chamber.
I wish to follow very strongly what my noble friends Lady Eaton and Lord Tope said. I have visited a number of authorities and it is true, sadly, that in many authorities where there has been large-scale voluntary transfer, there is a growing disjunction between the council side and RSLs. As I see it, aspects of this proposal from the Government may be designed to break that down and to reinforce the role of a councillor. In my authority we have introduced a tenants’ champion system in order to encourage people to use the local resource of the council as a first resource for complaint and redress against social landlords. That is desirable. Surely in the spirit of this Bill things should be settled as locally as they can be. There are all forms of bureaucracy and the ombudsman system in itself is potentially that. I agree that tenants may not need a filter, but in some circumstances they may need a local champion.
I am not quite so absolutist about these proposals as some others who have spoken. However, I hope that my noble friend will listen to the debate, particularly to the points made by my noble friend Lord Tope, and see whether some middle ground can be found that will enable tenants to have this recourse, but perhaps in the normal course of events to encourage people to seek to settle matters locally.
Lord Best
Amendment 54 is in the name of the noble Lord, Lord Kennedy and myself. Currently, the Secretary of State is able to direct the regulator to set standards for social housing in certain areas. In a strictly limited number of cases, he is able to direct the content of these standards. Clause 163 of the Localism Bill seeks to strengthen his powers in this area, allowing him to shape the contents of standards regarding tenancy exchanges in which tenants can swap properties. The view within the housing world is that this is giving the Minister too many powers to direct the behaviour of social landlords. The danger of accumulating more and more powers in the hands of the Secretary of State is that eventually, as one Minister after another brings their own fresh and no doubt good ideas to bear, you are effectively nationalising the housing associations; they are becoming creatures of government. They then run the risk of being regarded by the EU and others as public sector bodies. If the housing associations are no longer independent bodies and are regarded as public sector agencies, then all their borrowing becomes public sector debt and we have lost one of the key elements in having a social housing sector that is outside of public sector control.
So I am very sympathetic to standards about exchanges and the mobility of labour, and to the Minister’s hopes that housing associations will behave in a particular way, but laying this down, through direction to the regulator over these standards, does seem a step too far. I beg to move.
Earl Attlee
My Lords, Clause 163 is important in increasing mobility for social housing tenants who may wish to move for work, or to give care to or receive care from family or friends. We want to increase opportunities for tenants to move through mutual exchange. We have been working with the existing main providers of home-swap services to develop a technical solution that will put in place a national scheme that enables tenants to receive information on all possible matches across all providers in a scheme. Alongside this, we want all landlords to be required to provide their tenants with access to good internet-based home-swap services. Indeed, the majority of landlords who responded to our consultation on housing reform also agreed with this approach and said they could see no good reason why landlords should not subscribe to such a scheme. We therefore propose, through using the powers in this clause, that the social housing regulator should set a mutual exchange standard to make sure that social landlords sign up to good-quality services.
The noble Lord also raised the issue of public sector debt. While I am not undertaking to reflect on that and come back at a later stage, I will undertake to satisfy myself, through discussions with my officials, that the problem which the noble Lord alludes to does not exist. While I accept that some noble Lords view this as an overly bureaucratic approach, we believe that the benefits of increasing choice and mobility for social tenants must be the priority and that we should seek to deliver this better service for them.
Lord Best
I am grateful to the noble Earl for that response. I agree entirely that improving mobility and exchange schemes is a thoroughly commendable line to pursue. I think that I am now on my 23rd housing Minister since I started in this world. They have all had important ideas to add to the things that housing associations ought to do; it is just that in the end, if one is not careful, the cumulative effect is the creation of an agency that is simply a government bureaucracy. I am grateful for the noble Earl’s reassurances and beg leave to withdraw the amendment.
Lord Best
My Lords, this amendment concerns the terms of appointment of members for the new regulation committee. The intention is that “unsuitable” should be removed so that those who are indeed unfit or unable to serve could be removed by the Secretary of State but not those whom the Secretary of State deems to be unsuitable. That is extending the power a step too far—again, a theme of the amendments that I am bringing forward. “Unsuitable” could imply people being removed from office on grounds that would be comprehensible to the Secretary of State. It would not ensure the independence of those people to argue and, if necessary, to be a nuisance within that committee. They might do that in fear that they would be regarded as unsuitable somewhere down the line.
The Bank of England’s Monetary Policy Committee uses the terms unable and unfit to describe the powers for the removal of any members of that committee. Those words would seem sufficient for the regulation committee as much as for the Monetary Policy Committee, which has done well and which has had some members who have been quite happy to raise objections—and to be quite forceful in doing so—but who might have been regarded as unsuitable if there had been powers of ministerial intervention. This amendment simply seeks to lose “unsuitable”. I beg to move.
Earl Attlee
My Lords, I would imagine that a committee could have very free and frank discussions, perhaps lasting all afternoon, without falling foul of the test of unsuitability. On the other hand, if a member of the committee regularly interfered with the operation of the committee so that it could not function, the Secretary of State would have to step in.
Lord Best
My Lords, I will certainly not press the matter further. However, it is important for the Government to know that the housing sector is very concerned that this regulation committee is independent and that the people on it feel able to say things that are contrary to what the Government might wish to hear. That independence is paramount. I hope that that point has been taken. I beg leave to withdraw the amendment.
Lord Kennedy of Southwark
My Lords, I offer my support and that of the Opposition to the noble Lord, Lord Shipley, as I have done on a number of occasions on Report. He has identified a problem that needs to be addressed. It involves real people with real concerns. If the matter requires further work, as he says, and it can be done—I hope that the Minister will comment on that—the issue may be sorted out. Given that we are discussing a charity, I understand that the issue may be more difficult than it at first seems, but I hope that the government Front Bench will give a positive response.
Amendments 65 and 67 in this group stand in my name. Amendment 65 would ensure that a parent company of a group of housing associations can be registered even if it owns no housing itself. This would allow the regulator to regulate group members via the parent rather than directly if he thinks that that would be more effective. Amendment 67 concerns the appointment of members to housing association boards. The law as it stands allows the regulator to make unlimited appointments to a registered provider’s governing body provided that they remain a minority. For a 10-member board, it would allow the regulator to make nine appointments. My amendment limits the number of appointments the regulator may make to no more than four. This is a proportionate number of appointments and would enable the regulator to strengthen the board by adding members with sufficient skills and abilities to deal with any concerns that they may have about the board’s performance. However, the number would not be too overbearing as this sort of appointment would be of a temporary nature to help the housing association board discharge its duties more effectively.
Lord Best
Amendment 67 stands in my name and that of the noble Lord, Lord Kennedy. It concerns the appointments made by the regulator. It is important to note that this amendment relates only to appointments made by the regulator where the housing association has not failed in any way. It is not a disciplinary measure but constitutes a voluntary helping hand for the organisation. In a number of cases that I know well additional members have been appointed by the regulator as new members of the board and have been very helpful. However, there are limits to the number of appointments that the regulator ought to make to the board. We suggest that these be limited in future to a maximum of four. In my experience three new people are usually appointed to strengthen a board that has become weak—four is quite enough. We are trying to protect the independence and sovereignty of these organisations.
Earl Attlee
My Lords, as regards the amendment moved by my noble friend Lord Shipley, I recognise the strength of local feeling in the case that he highlighted. We have looked at his proposal extremely carefully and have discussed it with the social housing regulator, the Charity Commission, the National Almshouse Association and the National Housing Federation. We have also received helpful representations from the United St Saviour’s Charity and from residents of the Hopton’s Almshouses in Southwark.
I fully understand the reasoning behind the proposed amendment. However, we are concerned that the amendment seems to require an increase in bureaucracy and potential state interference in the proper exercise of charity trustees' discretion. Currently, the identification of a new trustee is a matter for the existing trustee to decide and we are not convinced that new regulatory controls should be applied. The proposed amendment would apply only where the corporate trustee of an almshouse happens to be a registered provider of social housing. It is not clear that there is a strong rationale for requiring that these almshouse trustees, but not others, seek consent.
Earl Attlee
My Lords, in Committee, the noble Lords, Lord Best, Lord Patel, Lord McKenzie and Lord Beecham, tabled an amendment designed to liberalise Section 122 of the Housing and Regeneration Act 2008, which restricts the payments that housing associations may make to their members, and a similar amendment has been tabled again by the noble Lord, Lord Best.
The Government agree with the aim of the amendment and have put down our own amendments to achieve it. The amendments we have tabled would give the Secretary of State the power, by affirmative order, to add to the classes of permitted payments that housing associations may make to their members. Taking this matter out of the Bill will give us sufficient time to explore a new exemption that delivers greater flexibility while protecting public investment. Any order would be made only following consultation with the Charity Commission, the regulator and the housing association sector. I beg to move.
Lord McKenzie of Luton
We are grateful to the Government for responding to the earlier amendment. I acknowledge that the noble Lord, Lord Best, will not move his amendment, but are classes 4 and 5 specified in that amendment classes that the Government would support and take forward under the process that they have set down?
Amendment 63 refers to,
“modifying or removing a permitted class added by order under this subsection”.
Do the Government have anything in mind concerning modifying or removing a particular class?
Lord Best
This amendment is about the new powers for the ombudsman to apply to a court to make its rulings legally enforceable—in other words, to insist, having made a judgment through the courts, that the landlord complies with the ombudsman’s decision. This is quite a big jump from the current scheme, which is based on informality. At the moment it is an inexpensive scheme. It is very accessible to complainants and people do not come with their lawyers. It is not part of the legal processes. It is feared that the new scheme will rather change the nature of the way in which the ombudsman works. It also carries the same risk that I have been harping on about today, that housing associations will slide into the public sector and become indistinguishable from public sector agencies, which has the effect thereafter that all of their borrowing will become part of the public sector debt, which I know the Government are very anxious to avoid. There is a risk that if housing associations are subject to legally enforceable decisions based on the opinion of a public authority—the ombudsman—they may not be regarded as being outside the public sector. That would be a calamity.
Once again, this is about trying to retain the independence and non-statutory nature of the sector. The removal of these new legal powers would be helpful in sustaining that independence and the success of the ombudsman’s scheme to date, without making the ombudsman’s rulings legally enforceable.
Lord Kennedy of Southwark
My Lords, I shall speak briefly to Amendments 75 and 76. They would ensure that the ombudsman’s service is not damaged by unintended consequences. What is wonderful about the ombudsman’s service is that compared with the courts, proceedings are informal, inexpensive and accessible. It is respected as its rulings are complied with by registered providers. The Government are proposing to solve a problem that noble Lords on this side of the House do not believe exists. We should be careful not to undermine the service. Will the Minister tell the House where the proposal has come from? Who has asked for it? How has it arrived here?
Earl Attlee
My Lords, I am confident that my department has properly considered those matters. It is obviously a very important issue and I have already undertaken to write to the noble Lord, Lord Best. Other noble Lords will of course get a copy, and there will be a copy in the Library.
“Exclusion of certain rural dwellings from the preserved right to buy
The preserved right to buy under section 171A of the Housing Act 1985 (cases in which right to buy is preserved) shall not be available in respect of a dwelling-house let by a registered provider of social housing in a rural area designated for the purposes of section 17(1)(b) of the Housing Act 1996 (right of tenant to acquire dwelling: supplementary provisions).”
Lord Best
My Lords, Amendment 81 is about the exclusion of some rural dwellings from the preserved right to buy. Quite a few tenants who were previously in the public sector have become tenants of a housing association, through large-scale voluntary transfers. Those tenants, and indeed others in social housing, have the preserved right to buy: the opportunity, if they move around, to buy the place to which they move if it is another social housing home. However, if they wish to move into a home that falls under a Section 106 planning agreement, which provides that the property must be retained in perpetuity as a rented social housing home—that is; it is a condition of planning that a certain number of homes are for renting—they will be unable to do so because the landlord would be in breach of the Section 106 agreement. The preserved right to buy is rather paradoxically preventing people moving out of the council house that they are in at the time and into a new property that has been built under a Section 106 agreement.
This amendment excludes certain rural dwellings from the preserved right to buy, allowing the people to move in and not then be able to exercise the right to buy that property because of the Section 106 agreement and the restrictions on that property. This amendment would be helpful to people moving around—to tenants. It is unfair at the moment that they have to be turned away, even though the case is good, because the properties are restricted and cannot be sold into home ownership on a permanent basis.
During the summer, I received a lot of helpful correspondence from Ministers and the civil servants have been very helpful. On this matter, I had a reply which I think indicated that the point had not been fully understood by the civil servants. They have been marvellous in every other respect, but with this one aberration I did not get a satisfactory response. I am not entirely sure that the point was fully understood, which must have been my fault when making it in the first place. If this small, unintended consequence of legislation could be cleared up in the Bill, it would be helpful to the mobility of people in rural areas and in places where there are restrictions in the properties that have been built, thus helping mobility. I beg to move.
Earl Attlee
My Lords, the noble Lord, Lord Best, in moving his amendment suggested that his point was not fully understood. He alarmed me somewhat because he talked about Section 106 and its consequences. Unfortunately, my notes do not refer to Section 106 and nor do the Q and As. If my response does not fully answer his question, I will of course write to him with further details.
Tenants who have been involved in a stock transfer from a local authority to a registered provider would have agreed to this transfer on the basis that they would retain their right to buy. We do not think that it would be proper to remove this right from the tenant. Equally, we do not think that it is right that secure tenants who are part of a future stock transfer should have their longstanding right to buy taken away simply because they live in rural areas and their homes have been transferred to a new landlord.
However, while we wish to ensure that transferred tenants are not denied their existing rights, there is statutory provision to ensure that the new tenants of these properties do not get the right to purchase their homes in order that the properties remain available to those in need of social housing. There are existing measures in place to ensure that homes in rural areas, which are sold under the preserved right to buy, remain available to people at affordable prices.
Landlords can already impose restrictions requiring owners who wish to sell to either resell only to people who have lived or worked locally for at least three years, or first offer their home to the landlord, giving them the opportunity to return the property to their existing housing stock if they wish to do so. These restrictions on reselling are already in place in a very significant proportion of our countryside and remain in place in perpetuity. In our view, this is sufficient.
I hope that I have met the noble Lord’s points. If I have not, I will urgently have a meeting with him and officials in order to further examine the issues.