Baroness Hanham
Main Page: Baroness Hanham (Conservative - Life peer)Growth and Infrastructure Bill
Baroness Hanham Excerpts
Lord Beecham
My Lords, can the Minister enlighten us on the robustness of the attribution to affordable housing allocations in terms of the 75,000 houses affected by this lack of viability? The information was given in a Written Statement last September by Mark Prisk MP, the relevant Minister. It did not distinguish between general viability issues and those that might have been occasioned by the inclusion within the affordable housing provisions, which have not been acted on.
Mention has been made of the £300 million the Government are making available to compensate for losses under Section 106. Has any of that been used to reduce this number of 75,000 and, if so, upon what basis? Can the Minister enlighten us on that—if not tonight, then subsequently? Viability can of course be called into question. There is a variety of problems, as the noble Lord, Lord Greaves, has just mentioned. They might particularly relate to buying at the top of the market and finding that land and other values have fallen since. That makes the problem of viability clear, but there could be other factors as well. If we are moving towards a position where guidance is to be given on viability after the consultation that has already been referred to, it would be sensible to distinguish between the different factors that contribute to the viability problems that are perceived to occur.
The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Hanham)
My Lords, I thank the noble Lord, Lord McKenzie, for his brevity in moving the amendment. He was so brief that I thought I might be able to leap up and be as brief in response; I have been thwarted on that.
There are two or three questions with which I want to deal quickly. First, on the availability guidance, I cannot promise to have the guidance available but I think I will be in a position to talk to noble Lords in a general way before Report, which they might find helpful. So I am arranging to set up meetings to discuss one or two technical aspects of the Bill before we get to Report. That will be for all Peers, so I hope that that will be useful.
With regard to the question raised by the noble Lord, Lord Burnett, the consultation was on the pre-2010 regulations rather than Clause 6 of the Bill. The Government’s response to the consultation will be made available to noble Lords shortly. I cannot say when “shortly” is, but I hope that we will have it before us.
I have a long reply here for the noble Lord, Lord Beecham, but I suggest that I write to him. With that, I hope that the noble Lord will be willing to withdraw his amendment.
Lord McKenzie of Luton
My Lords, I thank the Minister for her brief reply, matching the length of the moving of the amendments. The noble Lord, Lord Greaves, raised an important point about this being a wider issue than just Section 106. I look forward to seeing what the guidance includes. If it is not formally ready, I hope to have the opportunity for some detailed discussion before we get to Report. I am grateful to the Minister for that.
From what the Minister has just said, I understand that the parallel consultation on Section 106 has been completed but the Government’s response has not yet been issued, and that should be with us shortly. If that is the case, I hope that that will be with us before Report. I look forward to sharing with my noble friend Lord Beecham the response on the points that he raised. Perhaps the Minister can just confirm that issue about the availability of the pre-April 2010 consultation. Subject to that, I beg leave to withdraw the amendment.
Baroness Hanham
My Lords, I think I indicated that I hope to be able to share at least some of the ideas behind the response. I do not know whether I will be able to share the whole response, but I have offered the discussions and it will be much clearer by the time we get to them.
Baroness Hanham
“(11A) This section and section 106BB do not apply in relation to an English planning obligation if planning permission for the development was granted wholly or partly on the basis of a policy for the provision of housing on rural exception sites.”
Baroness Hanham
My Lords, this amendment serves to exempt planning obligations attached to planning permissions on rural exception sites from the provisions of this clause. Some time was spent on the issue of rural exception sites during consideration of this clause in the other place. We have considered very carefully the arguments and evidence put before us then and since, and I hope that the resulting amendment will be welcomed by this House.
Rural exception sites are unique in that they are not allocated sites. They come forward when a landowner is willing to provide land to enable housing for local people to be built. They are sites, often in sensitive locations, where housing would not normally be permitted. Rural exception sites do not operate in a competitive land market. Landowners provide land at generally low value, with no expectation of market values or high levels of return. Planning obligations are used to secure the housing for local people. Clause 6 would introduce a risk of unsettling the practice of rural exception housing by introducing the possibility of a challenge to the planning obligation. I am concerned that this could prevent sites coming forward in the future. I hope that noble Lords will welcome the exemption that we are providing and I beg to move.
Lord Cameron of Dillington
My Lords, perhaps I could ask a question about this amendment. It seems to me that one of the underlying concepts behind Clause 6 is that some affordable housing is better than none. In my opinion, that concept applies in spades, as it were, in rural areas and villages. In the current economic circumstances I worry about the ability to build rural affordable housing on exception sites. Of course, in large-scale developments, the affordable housing element is calculated at nil return to the developer and the landowner, but it is hoped that the remaining houses will provide the landowner and developer with a reasonable profit. In addition, non-affordable and affordable houses will be provided to house buyers. Therefore, the scheme goes ahead, operates and both sorts of houses are provided.
However, none of that applies in a village scheme of, say, six affordable houses. Often, everything is staked against you. It requires public funding—some of the £300 million, I hope—or charitable or semi-charitable funding to make it happen, as well as, usually, a generous landowner who often gives up what he or she sees as potential future “hope value” land to make these projects happen. However, it is not unknown for housing departments, housing providers—RSLs or whatever—planning departments and landowners to do a deal whereby planning permission is given for full-market houses on the exception site or nearby land to ensure the release of the land for affordable housing. Funding or part-funding may even be provided for these small schemes.
Therefore, while I understand that the Government’s desire is to reinforce the sanctity of exception sites, can the Minister clarify that it is not intended to discourage or prevent such deals being done? Rural affordable housing is something that we feel deeply about where I come from.
Baroness Hanham
My Lords, I think I can reassure the noble Lord that that is precisely what we are looking for. We recognise that there are philanthropic landowners who will give land; we know that there are housing associations and RSLs that will work for a specific scheme, and that is precisely what we want to ensure continues to happen.
It is important that small-scale developments in villages can be carried out. That is what the clause does. It ensures that nothing stands in the way of rural exception sites being developed, and the Section 106 agreement that will be negotiated to enable that to happen should make sure that the housing is for local people. That will be the only area where Section 106 would have relevance on this matter. It will be a straightforward process of land being released and a developer being available for affordable housing, social housing or, indeed, private housing. There will be no constraints on that taking place.
Lord McKenzie of Luton
My Lords, I place on record our thanks to the Minister for fulfilling a commitment made in the other place.
Lord McKenzie of Luton
My Lords, we have Amendment 55EB in this group. Before I speak briefly to that, I will say that I am happy to support all the other amendments in the group. I heard what the noble Lord, Lord Cameron, said about Amendment 55EA, but it refers to a developer paying a contribution proportionate to the increase in value; it does not mean that there is no upside for the developer.
Amendment 55EB seeks to amend the relevant period from three years to two. This is another point I will pursue. The relevant period in these circumstances is the period within which, if the Secretary of State route is taken, the planning obligation has to be completed. However, if the development is only partly started, I do not think that that applies. Proposed new subsection (12) states that the modifications are,
“the modifications necessary to ensure that, if the development has been commenced before the end of the relevant period”—
in other words, within three years—
“the requirement or requirements apply only in relation to the part of the development that is not commenced before the end of that period, and … such other modifications as the Secretary of State considers necessary or expedient to ensure the effectiveness of the requirement or requirements at the end of that period”.
Does that not mean that if you start a development, you have to complete it within three years, but if you start part of it, you neither have to complete the bit you have started or the other portion, otherwise you will revert to the original Section 106 requirement?
Perhaps I am misreading the provisions. I certainly understand that the intent is that a development must be completed within three years. We say three years is too long; we would like to set the time limit at two years. The issue is how proposed new subsection (12) will work when there is only partial commencement of a project. For me it is less clear. Perhaps the noble Baroness will write to me on that if she cannot deal with it this evening.
Baroness Hanham
My Lords, I thank noble Lords who tabled the amendments in this group. They seek to introduce some constraints to the appeals process. Before I turn to each issue, I will reiterate some of the main principles of our thinking. The appeal is meant to be impartial and evidence-based. It will be a targeted review of viability, and it will be dealt with quickly. It will result in a viable, affordable housing requirement that will be valid for three years—I will come back to that—at which point the original requirement will be reinstated. In other words, if a project has not been started within three years, the appellant will lose all the benefits they gained from the appeal.
Amendment 55D covers the 28-day period for a planning appeal decision. Currently a default 28-day determination period applies to authorities determining the applications made under new Section 106BA. The appeals are made to the authorities, which already have a huge amount of information relating to the original application. It should be noted that the 28-day period can be extended if that is agreed in writing between both parties—the authority and the applicant. The procedures for planning appeals are set out in secondary legislation. We will consult on a streamlined process for new Section 106BB appeals. That consultation has not gone out. Again, I will be happy to discuss it when we have our meeting.
Placing the same default 28-day period to determine appeals is not practical. The Planning Inspectorate does not have the knowledge that the local authority had when it first dealt with the application. The local authority has already negotiated the existing planning obligations and should be very familiar with the evidence on which the agreement is based. Also, the Planning Inspectorate’s procedures do not replicate those of a local authority. The inspectorate will need to consider what form of appeal may be required, whether it be written representations, a hearing or public inquiry. I am sure the noble Lord will understand that it is not possible to undertake a full inquiry, however speedily done, within 28 days. That is pushing it too hard. However, I hope I can offer reassurance that we fully intend this to be a quick process. We shall be placing challenging time limits on the Planning Inspectorate to turn around decisions on these appeals as quickly as possible.
Amendment 55E, introduced by the noble Lord, Lord Best, requires the Planning Inspectorate to give “material weight” to the decision and evidence of the local authority when considering an appeal; that is, the local authority’s case must be considered at the same time. As a point of principle, planning inspectors must be seen to make their own decisions impartially. In this case, they must take an impartial assessment of all the evidence submitted; they cannot just look favourably on some. It would therefore be wrong to provide an advantage to the evidence of one party—the local authority—by requiring in law that it is given particular weight. What if the quality of the evidence submitted by the local authority was very poor?
An inspector is not required in any appeal casework to give material or indeed any other defined weight to particular evidence. Rather, it is for the inspector to decide what weight should be given to any evidence, which could include the local planning authority’s decisions, according to the cases put, and then to justify that assessment. I hope the noble Lord agrees that we should not be trying to prejudice the Planning Inspectorate’s decisions but should let it take an impartial view.
Amendment 55F would require the development to commence within six months of an appeal decision. Amendment 55EB would make it valid for two years, rather than three, and Amendment 55EA seeks to ensure that the appeal decision should include a requirement that the local authority receives a contribution if market values rise. The noble Lord, Lord Burnett, has added his weight against this.
I believe that the clause already provides incentives for the developer to get on and build. Where the Planning Inspectorate issues an appeal decision in these cases, the revised affordable housing requirement is only valid for three years. Any part of the development which has not been commenced in that time will be subject to the original affordable housing requirement. One way or another, the original affordable housing requirement has to be dealt with within that timescale. We must give developers a reasonable amount of time to get on site. Following an appeal decision, the developer may need more time to begin development for legitimate reasons, such as compliance with pre-commencement conditions or securing vacant possession of the property. For more complex schemes, a limited time period to get on site would mean that the whole reassessment of viability could be wasted. We must balance our desire to get stalled sites moving with a realistic understanding of the development process. I am particularly concerned that we do not inadvertently constrain complex projects, such as regeneration schemes, by limiting the revised agreement inappropriately.
I would like to respond to the amendment requiring the Planning Inspectorate to include a provision for market uplift. On a question of principle, Section 106 is intended to be a mechanism by which development is made acceptable in planning terms. The amendment appears to introduce a wider purpose for Section 106, related to profit rather than mitigating the impact of development. I would be extremely concerned that this could set a precedent for the use of Section 106.
The intent of this amendment is to give local authorities some return if markets improve. This provides an incentive for developers to start building. However, the legislation does not prevent local authorities making their own judgments as to whether there should be some incentive within the revised agreement to start development, such as an improved affordable housing provision, if market conditions rise. The only constraint on the local authority is that the outcome should not be more onerous than the original obligation. In the event of an appeal, local authority proposals for such flexibilities could be submitted to the Planning Inspectorate as evidence. We will be clear in guidance that such evidence is appropriate. Again, I see this as a matter for local discretion, depending on site circumstances. We will be ensuring that guidance on this matter is included in our statutory viability guidance which, as I have said, we hope will be available before Report.
I hope that noble Lords will be reassured by those comments. The noble Lord, Lord McKenzie, asked whether, if a development is partly commenced at the end of the three years, the original obligation applies to that part of the development which is not commenced. So if the developer has built only part of the development and there is an obligation to develop affordable housing, and they have had a reduction, that lasts for only three years. If the developer has not got that part in hand, he will have to go back to the original amount agreed before the negotiation.
Lord McKenzie of Luton
Perhaps I may pursue that point. I understand generally the points around the three years, but if it is partly commenced and partly not commenced, in relation to the part that is commenced there is no requirement to complete that part within the three years in order to retain the benefit of the modified Section 106 agreement. That was the point I was pursuing. I understand clearly that if you do the whole lot, you have to do it within three years.
Perhaps it is the convoluted language used in proposed subsection (12), and we may pick it up subsequently, but that is what is not clear to me, particularly in view of what the noble Baroness has just said.
Baroness Hanham
I may need to write to the noble Lord on this. The whole development has got to start within three years. The noble Lord is looking as bewildered as I feel.
Lord McKenzie of Luton
I will not dwell on this because we have other things to discuss. As I understand it, the relevant period is three years—we would like to see a period of two years, but it is to be three years—in which the developer has to complete under the provisions of proposed subsection (11). I am trying to tie that up with what the noble Baroness has just said about starting to commence the development when it is only partly commenced. That is what is confusing me.
Baroness Hanham
My Lords, I do not want to cause any more confusion because it is too late for that. However, I may be able to respond. It is always a relief to know that I am right. The completion is not legally defined. It does not have to be finished within three years, but it must start within three years. I hope that that clarifies the position.
Lord McKenzie of Luton
I understand what the noble Baroness has said, but perhaps we will return to the issue.