Localism Bill

Lord McKenzie of Luton Excerpts

Tuesday 7th June 2011 Lords Chamber

[Lord McKenzie of Luton]

My Lords, I thank the noble Baroness, Lady Hanham, for the manner in which she introduced the Bill and for her expressed willingness to engage in discussion on amendments in areas of difficulty. This has been an extensive and knowledgeable debate on an important but still flawed Bill. It was late in arriving at the other place and it was significantly rewritten in its final stages there, which puts a particular onus on this House to hold the Government to account.

Amendments notwithstanding, there remains a massive inconsistency at the core of the Bill, which the Government heralded as having the intent to transfer power to local authorities and local communities, but which is everywhere fettered by constraints and regulation-making powers held at the centre. The powers that will be wielded by the Secretary of State under Clause 5 were referred to by my noble friend Lord Beecham and by many other noble Lords, and are simply not acceptable. The Bill was described by the noble Lord, Lord Shipley, as not written in the spirit of localism, and referred to by the noble Baroness, Lady Hamwee, as antidemocratic. It also caused the noble Lord, Lord Tope, to question his understanding of “localism”.

We support localism, which gives communities greater opportunities to shape their future and the nature of their local environment, and how services are to be delivered. Where the Bill facilitates this, we will support it. However, such opportunities must not be simply nominal. As my noble friend Lord Patel of Bradford and others asserted, they must be real for all members of our communities, not just for the well resourced and articulate. This is especially relevant for neighbourhood planning. As my noble friend Lord Beecham explained in his brilliant opening speech, I will concentrate my remarks on the Opposition's position on planning proposals and comment on some of the finance and tax provisions of the Bill.

As we have heard, the Bill gives to local communities the power to veto, through a referendum, excessive council tax increases; it is a one-way option only. The Secretary of State will determine the benchmark for what is excessive; how the referendum will be conducted; the question to be put; the publicity to be permitted; expenditure levels that will be allowed; and how the votes are to be counted. They can direct that the referendum provisions do not apply and decree the council tax requirement that must operate. Effectively, the Secretary of State will set the maximum level of council tax increases each year, but will also set the terms on which it can be debated with local communities—so much for localism. We will seek to get on the record how it is proposed that these powers will be used. We do not oppose the provisions for changes to the business rate supplement, but it seems that apart from that introduced by the GLA for Crossrail, which is unaffected by the changes, none is currently in contemplation. The noble Baroness, Lady Kramer, made interesting comments about infrastructure funding; perhaps we will have an opportunity to debate that in Committee.

As to the broadening of powers for local authorities to grant discretionary non-domestic rate relief, we note and concur with the impact assessment that, though welcome, there will be little appetite for funding such discounts when there is no new government money, and where the local source of funding will have to come from council tax payers at a time when threatened referendums will constrain what can be raised. Obviously, different considerations would apply if the Government were to deliver on their commitment to the localisation of business rates, and we must scrutinise these proposals against that prospect. Perhaps the Minister will take the opportunity to update us on progress in this matter, and explain how the Bill will ensure that the commitment can be accomplished, together with ensuring that all authorities have adequate resources to meet the needs of their communities. Have the terms of the resource review finally been set, and can we still expect the report in July, before we finish our Committee deliberations?

As my noble friend outlined, notwithstanding amendments, we remain implacably opposed to the proposals to levy EU fines on local councils, and will work with other noble Lords to have them removed from the Bill. As the noble Baroness, Lady Eaton, and others rightly said, the LGA has designated these clauses as unfair, unworkable, dangerous and unconstitutional—again placing too much power in the hands of the Minister.

We support the thrust of the changes to housing finance, building as they do on the work of the previous Government. However, true to form, the Secretary of State cannot resist holding powers to reopen a settlement payment and to determine the overall indebtedness of a local authority, thereby undermining the new self-financing freedoms for local authorities.

The noble Lord, Lord Best, pressed the point—and we agree with the LGA—that in the prudential code the sector already has an effective approach to managing borrowing, and that the ongoing risk of changes to the settlement creates an uncertainty which is unhelpful to the planning of new investment. Many noble Lords referred to the planning system and the changes that the Bill encompasses. They are a major untested upheaval, made worse by the blundering approach of the Secretary of State, who had to be restrained by the courts but not before creating confusion and chaos for the local planning authorities, developers and communities alike.

We heard some powerful input from my noble friend Lady Andrews, the noble Lords, Lord Cameron, Lord Marlesford and Lord Redesdale, and the noble Baroness, Lady Parminter, among others. The demise of regional spatial strategies and pronouncements to ignore housing allocations have, according to the National Housing Federation, already caused dramatic reductions of some 200,000 housing units being planned for in local development plans.

The regional spatial strategy regime is to be replaced by a duty to co-operate. There are to be changes to the process of local development frameworks and a new neighbourhood planning regime. Of course, alongside this sits—although not part of the Bill—the incentive of the new homes bonus. The abolition of regional spatial strategies will leave England as the only country in Europe without a regional planning framework, with, in our view, the duty to co-operate as an inadequate substitute.

In scrutinising these provisions we might start by borrowing from the Town and Country Planning Association, which says:

“At its best, the planning system can create the certainty to secure long-term investment and growth, address housing need, secure sustainable development and help local people to have a real voice in the future of their community”.

It is a good yardstick by which to evaluate the Bill.

Do the Government still adhere to the five principles of sustainable development set out in 2005? We await the promised draft national planning policy framework, where apparently all will be revealed including the promise that sustainable development will remain at the heart of the planning framework. But the omens are not good. We have had budget pronouncements—change of use and promised land auctions, for example—which suggest other considerations might prevail. We have Clause 124, which elevates financial receipts in the hierarchy of material considerations. This clause was introduced with no consultation, dialogue or debate and should surely not survive our deliberations. We have the recently published draft NPPF of the advisory group, which has a weak and inadequate definition of sustainable development. Perhaps we can be told the status of this document. The Minister will understand that in the absence of an acceptable draft of the official NPPF, the level of concern will continue to feed attempts to get definitions of sustainable development and the presumption in favour of sustainable development on the face of the Bill—a move which we will support.

Given its significance, I do not see how we can reasonably complete our Committee stage deliberations without a chance to scrutinise a draft NPPF. We will also continue to pursue amendments proposed by our colleagues in another place, focusing on putting the heart back into our high streets by requiring local planning authorities to include a retail diversity scheme within its local development framework.

The duty to co-operate is the Government's attempt to recognise the need for co-ordination at a spatial level higher than individual local planning authorities. Despite amendment, it falls short of an effective strategic approach to planning. Assessment of whether co-operation has taken place will be made retrospectively at the local development plan soundness test, but there are no effective boundaries to shape the extent of co-operation and there is no clarity on what is to be covered. Our concern is that the duty is essentially voluntary. As in the other place, we will seek to amend the Bill to ensure that sustainable development is a core objective of the co-operation, with obligations specifically to cover climate, housing, biodiversity and transport and to base the co-operation on a spatial area rather than just on neighbouring authorities.

I believe we would all support the concept of community-based planning and the opportunity for communities to shape their neighbourhood and local environment, but this will have to be accessible to all. It seems to us that the Government are still struggling with democratic legitimacy in cases where the neighbourhood is not defined by a parish council. The processes involved are incredibly bureaucratic and raise issues of capacity both for local authorities, which have a duty to support neighbourhood planning, and among the communities themselves. Neighbourhood forums, even with the need for an increased membership, need transparency and accountability and should have the involvement of elected councillors. The prospects for disputes seem high with potentially competing bids for recognition, disputes over whether someone works in an area and the status of a neighbourhood plan when the local development framework has not been completed.

We welcome the provisions for pre-application consultation. We also welcome the Government’s change of heart in continuing with the community infrastructure levy but will use the opportunity in Committee to explore further the issues raised with us and, doubtless, other noble Lords concerning the interaction with Section 106 money, its implications for affordable housing and the consequences of widening its use to the maintenance of infrastructure. Central diktat about how local authorities are to apply the levy is certainly outwith the spirit of localism.

The new planning system also has to be considered in the context of the new homes bonus, which, it is asserted, will be a powerful incentive for local authorities to pursue housing development. However, we do not consider this to be fully fit for purpose. We know it is going to be funded in large measure by top-slicing revenue support money. It is payable in retrospect and on the basis of net additions to the housing stock, so rather than being a plan for addressing national need, it will disadvantage regeneration projects and cause resources to be redistributed in favour of areas where demand for housing, particularly high-value housing, is strong. It can be no substitute for the necessity for local authorities to undertake a robust assessment of housing need. However, such assessments of themselves will only by chance aggregate to what at national or sub-national level amounts to overall need, including the social housing needs of those on low incomes.

There is plenty in this Bill to keep us busy in the coming weeks. We will scrutinise it rigorously but responsibly. I doubt whether eight days will be enough, given the debate we have had today. We will work with others and in particular will seek to: roll back and constrain the raft of powers to be held at the centre which imperil vital services, particularly those in Clause 5; to delete the abomination of imposed shadow mayors and the merger of roles; to remove provisions which allow EU fines to be visited arbitrarily on local authorities; to amend its housing provisions to protect those becoming homeless and in need of secure affordable housing; to support the LGA in seeking to improve the changes to housing finance; to put the presumption of sustainable development and a robust definition in the Bill; to strengthen the duty to co-operate; and to challenge some of the bureaucracy and lack of democratic legitimacy around neighbourhood planning. There is much else: the Welsh dimension, the issues around nationally significant infrastructure projects, London governance, the role of the MDC and the Standards Board, not to mention compulsory purchase and the compensation provisions.

In short, we want this Bill to be truly about localism where individuals and local communities are empowered, supported and resourced to shape and influence their neighbourhoods. To achieve this, we will need to change the Bill. We look forward to working with the noble Baroness to that effect.