Local Authorities: Financial Difficulties

Lord Bishop of St Edmundsbury and Ipswich Excerpts

Wednesday 14th February 2024 Lords Chamber

[Baroness Scott of Bybrook (Con)]

The Government do appreciate what local government can do, and it is not just Labour local government that is delivering this innovation and great services for local people. At this point, I should thank local government for everything it does. As I said earlier, we listen to local authorities all the time, which is why we put in £600 million more in January.

[The Lord Bishop of St Edmundsbury and Ipswich]

My Lords, may I return to the issue of reforming the model? I have recently been caught up in discussions with Suffolk County Council about funding cuts it was making to its arts programmes. That drew me into detailed discussions about what its priorities were and the challenges it was facing. It said that two things would make a huge difference. The first was knowing further in advance what it might receive; it was looking for a three-year projection. The second was for the groundwork for the reform to which the Minister has been referring to be done now, rather than in the future.

[Baroness Scott of Bybrook (Con)]

The right reverend Prelate is absolutely right: local government is asking for reform of the whole system, but it is also asking for certainty for future years. Recognising the importance of this, the Government intend to return to multi-year settlements in the next Parliament when circumstances allow.

Levelling-up and Regeneration Bill

Lord Bishop of St Edmundsbury and Ipswich Excerpts

Wednesday 3rd May 2023 Lords Chamber

[Lord Best (CB)]

My Lords, I am speaking to Amendments 336 to 339 and 354 in my name, all concerned with the mechanisms of the new infrastructure levy.

Amendment 336, supported by the right reverend Prelate the Bishop of Chelmsford, would require planning authorities, when devising their charging schedule for the new infrastructure levy, to recognise that different kinds of development have different levels of viability and profitability. Not least, building specialist accommodation for older people needs more help than building standardised, uniform homes for sale or rent with the minimum of extra amenities. The amendment seeks to ensure that the charging schedule for the infrastructure levy recognises that more help from the levy will be needed for more specialist developments.

We have had excellent debates in this Committee on housing for older people, and indeed on how the socially worthwhile elements of new residential developments affect viability, so I will not detain your Lordships by making the case that the new levy arrangements should enhance the production of much-needed supported housing, such as retirement accommodation. I simply commend this tweak to the IL arrangements.

I am also speaking to the cluster of amendments in my name—Amendments 337 to 339 and 354—that all relate to one key point. They come from the well-respected Royal Town Planning Institute and are intended to simplify the processes for creating the infrastructure levy. They would do so by getting rid of the requirement for an independent examination of IL charging schedules, relying instead on a simpler, direct relationship between the local planning authority and the Secretary of State.

The RTPI argues that, since the Bill already gives the Secretary of State the power to intervene if the examination outcomes are regarded as unsuitable, an additional independent examination is an unnecessary extra step and should be replaced, in setting the IL rates, by direct dealings between central and local government. That would have the beneficial effect of deterring the lengthy and costly legal challenges to charging schedules that can otherwise be expected.

As noble Lords know, the Bill introduces a new mandatory framework for local planning authorities to extract the infrastructure levy from developers carrying out new development. Local planning authorities will be required to prepare a charging schedule and a price list outlining local costs and thresholds of development for the levy, and to consult the public accordingly. In addition, the Bill then requires an independent examination, probably by the Planning Inspectorate, before the charging schedule is published. The Secretary of State will be empowered to require charging schedules to be amended.

All this can become a long-winded and expensive process, so the amendments seek to cut out one of the sources of delay and cost. The Bill’s impact assessment says the new system is estimated to cost between £12 million and £18 million, absorbing a portion of the levy to cover those costs. Ministers have indicated that they expect the implementation of the infrastructure levy to take place over this decade, and the impact assessment explains that the expected start-up and administrative costs for the recruitment and training of personnel in local authorities are expected to be no less than £147 million, and perhaps as much as £440 million, over the 10-year appraisal period.

At present only about half of local planning authorities, 48%, have introduced the current community infra- structure levy, the precursor of the new infrastructure levy. The other councils have considered it unfeasible to introduce the CIL, not least because of the cost. That emphasises the need to keep things simple for the new infrastructure levy.

The amendments would remove the requirement for charging schedules to be examined independently, representing a significant simplification. That would reduce the otherwise heavy administrative burden for the Planning Inspectorate in examining every local authority’s charging schedules within a defined period, which would require considerable extra capacity. The Bill ensures accountability through public consultation, which should mean that infrastructure provision recognises the community’s wishes, and through the guarantee of the Secretary of State’s reserve powers to intervene when necessary.

Amendment 335 was introduced ably by the noble Baroness, Lady Warwick of Undercliffe; if more than four names had been allowed in support of this one, mine would have been one of them. The amendment would prevent infrastructure levy receipts being spent on any unspecified items rather than being used for affordable housing or infrastructure. When the Bill was in Committee in the Commons, the Minister said that

“the levy regulations may allow levy receipts to be spent on matters other than infrastructure”—

or affordable housing—

“such as improvements to local services and delivery of local programmes that are valued by local communities. Although the infrastructure levy will primarily be spent on infrastructure and affordable housing, that will give us the scope to allow local authorities more flexibility over how they spend the levy if those priorities have been met”.—[Official Report, Commons, Levelling-up and Regeneration Bill Committee, 6/9/22; col. 622.]

That somewhat open-ended statement is a bit confusing. It is not of great concern if the final words are the key—namely, that there is flexibility over how councils spend the levy if the infrastructure and affordable housing priorities have been met—but if that opens up the IL resources to be spent on any number of good causes, the whole concept of an infrastructure levy is derailed. Can the Minister please reassure the Committee that this is not an opening of the door to all kinds of worthy but quite different spending? Amendment 335 would clarify the position, and I strongly support it.

[The Lord Bishop of St Edmundsbury and Ipswich]

My Lords, I support Amendment 335 in the name of the noble Baroness, Lady Warwick, and Amendments 336 and 337 in the name of the noble Lord, Lord Best, to which my colleague the right reverend Prelate the Bishop of Chelmsford has added her name as the Church of England’s lead bishop for housing. I am aware, as others have commented, that we are touching on matters that will arise again in the 10th group.

Amendment 335 would address a significant weak spot in the infrastructure levy. As the Bill stands, there is no meaningful protection of developer contributions to the infrastructure levy for affordable and social housing. The amendment would remove the risk of infrastructure levy regulations diverting funds away from such housing provision.

I am glad to support Amendment 337 in the name of the noble Lord, Lord Best. Together with Amendments 338 and 339, it would remove a portion of Schedule 11 containing wide-ranging provision for the examination of charging schedules for the infrastructure levy.

At an earlier point in our proceedings I was pleased to speak in support of the noble Lord’s Amendments 221 and 207, both of which seek to provide for greater inclusion of older people’s needs in development planning in the Secretary of State’s role and at the level of local authorities. Amendment 336 is a further critical piece to address the challenge of growing needs in our increasingly ageing population and the housing crisis. In enabling the charging authority to consider additional evidence, its ability to determine the viability of developments, including older people’s housing, will be better informed. It is particularly key that such developments are given due and quality consideration as we face growing need.

[The Earl of Lytton (CB)]

My Lords, I rise to speak to Amendment 348 in the name of the noble Baroness, Lady Scott of Needham Market. The reason that I have taken on this role is that I am one of her predecessors as president of the National Association of Local Councils. I express my gratitude for the comments of the noble Baroness, Lady Taylor of Stevenage, on the value that she and her party place on that role. I also must declare a professional interest, particularly as a valuer, because from time to time I get to pore over the nitty-gritty of things like development appraisals and viability assessments, which are complex, capable of many interpretations and create all sorts of issues to do with how they may be interpreted.