Levelling-up and Regeneration Bill

Baroness Scott of Bybrook Excerpts

Committee stage
Wednesday 3rd May 2023 Lords Chamber

[The Parliamentary Under-Secretary of State, Department for Levelling Up, Housing & Communities (Baroness Scott of Bybrook) (Con)]

My Lords, Amendment 292, tabled by the noble Lord, Lord Carrington, would place a new statutory duty on all acquiring authorities to act fairly towards anyone involved in the compulsory purchase process and would require the Secretary of State to issue a compulsory purchase code of practice setting out how the statutory duty to act fairly must be discharged by acquiring authorities.

I assure noble Lords that the Government understand the concerns raised on ensuring there is a fair balance between the interests of a body exercising compulsory purchase powers and the person whose interests are being compulsorily acquired. Used properly, compulsory purchase powers can contribute to effective and efficient regeneration, essential infrastructure, the revitalisation of local areas and the promotion of business leading to improvements in quality of life and the levelling up of communities. However, acquiring authorities should only use compulsory purchase powers where there is a compelling case in the public interest and the use of the powers is clearly justified. The justification for a CPO must provide sufficient evidence to demonstrate that the benefits of the compulsory acquisition of land outweigh the harm to any individuals. It is for the acquiring authority in each CPO to determine how best to do this.

The Government’s guidance on compulsory purchase is clear that negotiations should be undertaken by acquiring authorities in parallel with preparing a CPO to build relationships and demonstrate that the concerns of landowners and further claimants are treated with respect. The guidance sets out that a benefit of an acquiring authority undertaking early negotiations is to identify what measures it can take to mitigate the effects of the scheme on landowners. It also requires that, when making and confirming an order, both acquiring and authorising authorities should be sure that the purposes for which the CPO is made justify interfering with the human rights of those with an interest in the land affected. For these reasons, the Government consider the proposed duty is unnecessary. The existing compulsory purchase legislative and policy framework has safeguards in place to protect individual interests and ensure a fair balance is maintained between an acquiring authority and the person whose land is being acquired.

Amendment 410, tabled by the noble Baroness, Lady Taylor of Stevenage, would insert a new subsection into Clause 165 to provide that the Secretary of State may define by regulations the meaning of “regeneration” in new Section 226(1B) of the Town and Country Planning Act—inserted by Clause 165—providing that local authorities have been consulted. I thank the noble Baroness for raising this constructive amendment as it allows me to clarify to the House the reason for the introduction of Clause 165 of the Bill.

Local authorities have a wide range of existing powers to compulsorily acquire land in support of their functions. Clause 165 adds “regeneration” to the planning compulsory purchase power under the Town and Country Planning Act to put it beyond doubt that local authorities can use these powers for development with a clear regeneration benefit. The Government are making it clear through Clause 165 that local authorities’ existing planning compulsory purchase powers for facilitating development, redevelopment and improvement also include regeneration activities. The term regeneration is not specifically defined in legislation to not overly restrict use of the broad planning compulsory purchase power.

However, the Government’s guidance on compulsory purchase indicates how regeneration can be achieved through CPOs: for example, bringing land and buildings back into effective use; encouraging the development of existing and new industry; creating attractive environments; and ensuring that housing and social facilities are available to encourage people to live and work in the area.

The Government believe that setting out in regulations a definition of the meaning of regeneration risks unnecessarily constraining and narrowing use of the planning compulsory purchase power, which could limit its effectiveness for local authorities. This would run contrary to the Government’s objective of encouraging use of CPO powers by local authorities where there is a compelling case in the public interest to bring forward development, including for housing, regeneration and infrastructure. I trust I have given the Committee reassurance that the purpose of Clause 165 is to provide local authorities with suitably broad compulsory purchase powers enabling the delivery of regeneration benefits.

Amendment 411, tabled by the noble Baroness, Lady Bennett of Manor Castle, would insert a new clause which would amend Section 226(1) of the Town and Country Planning Act to extend use of the CPO power under that section to where a local authority wishes to compulsorily acquire land to facilitate the provision of affordable housing or social housing. I thank the noble Baroness for bringing this amendment. As alluded to in my response to the previous amendment, local authorities have a wide range of existing powers to compulsorily acquire land to support their functions, and Clause 165 of the Bill is making it clear that the CPO power under Section 226 of the Town and Country Planning Act may be used for regeneration purposes too.

Use of this extended power by local authorities could, among other things, involve the construction of affordable or social housing forming part of a large-scale regeneration scheme or the reconstruction of buildings to deliver affordable or social housing. Local authorities also have compulsory purchase powers available to them under the Housing Act 1985. These powers may be used to compulsorily acquire land, houses or other properties for the provision of housing accommodation which must achieve a quantitative or qualitative housing gain. This could include, for example, the provision of affordable or social housing.

I hope I have given the Committee reassurance that Clause 165 of the Bill gives local authorities a broader compulsory purchase power which may be used to facilitate affordable or social housing forming part of a regeneration scheme. Also, local authorities already have powers available to them to compulsorily acquire land or properties to support their housing functions.

Amendment 412, tabled by the noble Baroness, Lady Taylor of Stevenage, would insert a new clause which would add a new subsection to Section 226 of the Town and Country Planning Act. I thank the noble Baroness for raising this amendment as again it allows me the opportunity to outline to the House the existing compulsory purchase powers available to local authorities to increase the number of residential properties in their areas. As I have said, under the Housing Act 1985 local authorities have specific compulsory purchase powers which, when used, must achieve a quantitative or qualitative housing gain in their areas. These powers may be used by local authorities to compulsorily acquire land, houses or other properties for the purpose of increasing housing accommodation in their areas.

Under the Town and Country Planning Act, local authorities have further compulsory purchase powers to deliver a range of types of development and infrastructure. Requiring local authorities to deliver replacement and extra housing in addition to the main purpose for the compulsory purchase is likely to increase the costs of providing essential infrastructure and beneficial development. This will discourage the use of compulsory purchase and run contrary to the Government’s objective of encouraging use of CPO powers by local authorities where there is a compelling case in the public interest to bring forward development, including, as I say, for housing, regeneration and infrastructure. I hope I have given the Committee reassurance that local authorities already possess specific compulsory purchase powers for the purpose of increasing the quantity and quality of residential development in their areas.

I move now to the question of whether Clause 174 should stand part. Perhaps I could begin by directing the Committee’s attention to the provisions of Clause 174 in the round, which are in the technical area of compulsory purchase compensation, and to respond to concerns raised by the noble Lord, Lord Carrington. The Land Compensation Act 1961 contains the principal rules for assessing compulsory purchase compensation. Under the current rules, when assessing the open market value of land to be acquired, there are statutory assumptions which must be taken into account. This includes discounting the effect of the compulsory purchase scheme, known as the no-scheme principle. The landlord receives a value for the land which they would have received if the CPO and associated investment had not existed. The Government want to ensure that the improvement of land enabled by a transport project is equally able to benefit from the definition of the scheme under Section 60 of the 1961 Act and the scope of the no- scheme principle, as the regeneration and redevelopment of land currently can. There is no reason why the improvement of land should be excluded from the scope of this definition, and the Government are seeking to achieve this through Clause 174.

Clause 174 amends Section 6D of the 1961 Act by inserting a definition of development which includes redevelopment, regeneration and now the improvement of land. The change further aligns the wording of Section 6D with the amendment the Government are making to local authority CPO planning power under Section 226 of the Town and Country Planning Act 1990, at Clause 165, for English local authorities to use consistent terminology. I understand government officials have met the noble Lord, Lord Carrington, to discuss his concerns with Clause 174, and I hope my explanation of the clause’s purpose has given the Committee reassurance that its focus is on the consistent application of the statutory no-scheme principle to the improvement of land, alongside the redevelopment and regeneration of land.

I move now to the question of whether Clause 175 should stand part. Clause 175 is another clause in the technical area of compulsory purchase compensation. As I outlined in my response to the noble Lord, Lord Carrington, on the previous amendment, the Land Compensation Act 1961 contains the principal rules for assessing compulsory purchase compensation. Under the current rules, when assessing the open market value of land to be acquired, there are statutory assumptions which must be taken into account. Not only does this include discounting the effects of the compulsory purchase scheme, known as the no-scheme principle, but it requires that the planning prospects of the land being acquired must be considered. One method of assessing the planning prospects of land is to establish appropriate alternative development; namely, development which would have got planning permission if the acquisition of the land through compulsory purchase was not happening. Where appropriate alternative development is established, it may be assumed for valuation purposes that planning permission is in force. This is known as the planning certainty, and, assuming the value of the appropriate alternative development is greater than the existing use value, it creates an uplift in the value of the land.

The 1961 Act allows parties concerned with the compulsory purchase to apply to a local planning authority for a certificate to determine whether there is development which, in its opinion, would constitute appropriate alternative development. These certificates, known as CAADs, are used as a tool to establish whether there is an appropriate alternative development on the site, and thus planning certainty for valuation purposes—namely maximum uplift in value attributed to the certainty that development would be acceptable and granted permission in the no-scheme world. Under current rules, there is no requirement to apply for a CAAD to establish planning certainty and secure any resulting uplift in the value of land. The purpose of Clause 175 is to ensure that the compulsory purchase compensation regime does not deliver elevated levels of compensation for prospective planning permissions, which would result in more than a fair value being paid for the land.

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[The Earl of Caithness (Con)]

My Lords, I am grateful for that very full reply from my noble friend, which I will want to read, but a number of points in it concern me. I hope that she will find time for a meeting between now and further stages, because there are some quite serious issues which are unclear.

My noble friend was absolutely right when she spoke about the need for the local authority to build relationships. All I can say to her is that these proposals are shattering relationships. A lot of work will have to be done to try to get them back.

Does a CPO override a conservation covenant? If my noble friend has a conservation covenant on her stud with her horses and the local authority wants to pinch a bit of land with state theft for some affordable houses, who is going to win? Perhaps she might have to write to me on that one. I have some more questions—

[Baroness Scott of Bybrook (Con)]

I just want to make sure that the Committee knows I own no land and rent no land. Certainly, on a question such as that, I would rather give a written answer to my noble friend.

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[Lord Bellingham (Con)]

My Lords, I rise very briefly to support my noble friend Lord Northbrook. It is a very simple and straightforward amendment, but it raises some important principles. As my noble friend pointed out, the BSI is a well-resourced organisation—a commercial, not-for-profit body established under royal charter. I had a look at its website, although I did not look at its accounts. It would be wrong to say that it is awash with money, but it has plenty of money to carry out the excellent work it does on behalf of many different parts of industry in our society. There is no reason whatever why it cannot publish these matters, and it would make a huge difference to residents to be able to know exactly what is going on.

Maybe the Minister can look at one particular point —my noble friend did not mention this, though he mentioned a number of other bodies that are mentioned in statute and different legislation that do make reports and other information available free of charge. I gather that in Ulster such documents are online completely free of charge, and that is a precedent that our Government could follow.

I hope that if the Minister cannot promise to accept the amendment, she will at least undertake to talk to the British Standards Institution about this, because it is a problem that could be solved very easily.

[Baroness Scott of Bybrook (Con)]

My Lords, Amendment 311 in the name of my noble friend Lord Northbrook would require the Government to make all standards that relate to all planning Acts, or local authority planning policy, online and free of charge.

Our national standards body, the British Standards Institution or BSI, publishes around 3,000 standards annually, and these standards are the product of more than 1,000 expert committees. The BSI is independent of government and governed by the rights and duties included in its royal charter. This includes the obligation to set up, sell and distribute standards of quality for goods, services and management systems. About 20% of the standards produced are to support the regulatory framework. This will include a minority of standards made to support planning legislation and local authority planning policy.

To ensure the integrity of the system and support the effective running of the standards-making process, the funding model relies on the BSI charging customers for access to its standards. As a non-profit-distributing body, the BSI reinvests its income from sales in the standards development programme. In some circumstances, the Government will fund BSI standards to make them available. For example, last year the then Department for Business, Energy and Industrial Strategy made available 100,000 copies of one of the energy management systems standards to UK SMEs.

I hope that this provides sufficient reasoning for my noble friend Lord Northbrook to withdraw his amendment. I am very happy to discuss this further with noble Lords and the BSI.

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[Lord Foster of Bath (LD)]

My Lords, I will be very brief. I speak only because of the words of the noble Lord, Lord Bellingham, just now. Like him, I am very keen to see, and as a Minister had some responsibility for, the improvement of high streets. The noble Lord is quite right that on a high street these changes could take place without the significant problem to local residents that he described might happen in a more residential area.

We are very supportive of the principle of Amendment 312, but I say very gently to the Minister that if, as I suspect, she is going to suggest that there is no need for this amendment, I would encourage her to remind herself of the earlier debate on the agent of change principle. That too was apparently not necessary. Frankly, it seems that one or the other will be necessary in the circumstances that the noble Lord, Lord Bellingham, described in a residential area. We need either a separate use classification or the agent of change principle to give local residents that protection.

[Baroness Scott of Bybrook (Con)]

Amendment 312, in the name of my noble friend Lord Northbrook, seeks to prevent the movement of premises being used as shops, banks, gyms, offices et cetera within (a) and (c) to (g) of class E to be used instead as cafés or restaurants in (b).

I take this opportunity to make clear to noble Lords that vibrant and diverse high streets and town centres are vital to communities, as places where local people shop, use services and spend their leisure time.

The Government introduced the commercial business and service use class in 2020 to support our high streets and town centres, enabling them to respond quickly to changes in consumer demands. This use class includes a wide range of uses commonly found on our high streets, such as shops, banks and offices, as well as services such as creches and health centres. Movement between uses within the class does not constitute development and therefore does not require planning permission. Thus, this class provides flexibility to move between such uses and allows for a mix of such uses to reflect changing retail and business models, and to avoid premises being left empty.

We believe that restaurants and cafés are an important part of our high streets and town centres. Such uses support high street vitality, attracting people to the high street to shop and spend their leisure time, and we would not want to limit them. My noble friend’s amendment seeks to restrict the flexibility of premises within the commercial, business and service use class to be used as cafés or restaurants. However, a permitted development right cannot be used in this way to limit movement within this use class. The legislative approach of this amendment is therefore flawed and we are unable to support it.

I turn next to Amendment 312F in the name of the noble Baroness, Lady Taylor of Stevenage, which seeks to require the Secretary of State to publish a review, within 12 months of the Bill achieving Royal Assent, of all permitted development rights. Permitted development rights are a national grant of planning permission that allow certain developments, including building works and changes of use, to be carried out without an application for planning permission having to be made. Permitted development rights have been a well-established part of the planning system for many years, supporting homeowners and businesses. In recent years, new permitted development rights have been used to support housing delivery. The rights are helping deliver much-needed additional new homes, including more than 94,000 homes in the seven years to March 2022.

In response to comments about the quality of some of the homes delivered, we commissioned research into the operation of the rights, published in July 2020. We subsequently legislated to ensure that all new homes delivered under permitted development must, as a minimum, meet the nationally described space standards and have access to adequate natural light in all habitable rooms. In addition, the current consultation on the infrastructure levy seeks views on the circumstances in which it may be appropriate to apply the infrastructure levy to permitted development.

We continue to keep permitted development rights under review, so this amendment is not necessary. It would also be impractical, as it would require a disproportionate review of 155 separate permitted development rights, all within the 12 months proposed. On these grounds, we will not be able to give this amendment our support.

[Baroness Taylor of Stevenage (Lab)]

I am grateful for the response, but it seemed a bit equivocal around permitted development rights and the infrastructure levy. Can the Minister give us some more clarity? Is it under consultation still? One of the important problems with permitted development is that is has not attracted any infrastructure support whatever or any percentage of affordable housing. For example, if an office building is converted into luxury flats, there is no infrastructure provided and no requirement to provide affordable housing that sits alongside it. This is a very important message for the infrastructure levy that it should incorporate permitted development.

[Baroness Scott of Bybrook (Con)]

It is in the current consultation. I assure the noble Baroness that we will be taking account of the consultation responses on this.

I turn next to Amendment 312J, in the name of the noble Baroness, Lady Hayman of Ullock, which seeks to require the Secretary of State, within 60 days of the Bill achieving Royal Assent, to make a statement on the use of Article 4 directions by local authorities, and to explain the reasoning behind occasions when they may be modified by the Secretary of State and their resulting consistency.

It may be helpful if I briefly explain Article 4 directions. Permitted development rights are a national grant of planning permission. These allow certain building works and changes of use to be carried out without having to make an application for planning permission. Where it can be clearly evidenced that a permitted development right will cause unacceptable harm to a particular area, local authorities can make an Article 4 direction. This stops development proceeding under the permitted development right and requires that a planning application is submitted.

While Article 4 directions are consulted on and made locally, the Secretary of State has the power to modify or cancel an Article 4 direction. He will intervene where he considers that there are clear reasons for doing so, most particularly where he considers that they do not comply with national policy, as set out in paragraph 53 of the National Planning Policy Framework. This policy requires that all Article 4 directions should cover the smallest geographic area possible. Where they relate to a change from non-residential to residential use, they should be made only to avoid wholly unacceptable adverse impacts. All other Article 4 directions should be necessary to protect local amenity or the well-being of an area. Local authorities must notify the Secretary of State when they make an Article 4 direction.

When it is considered that an Article 4 direction as made by a local authority does not comply with national policy, officials have worked with the local authority to agree a revised Article 4 direction. Between 1 July 2021, when there was a change in national policy, and 3 May 2023, modifications have been made to Article 4 directions from 10 local authorities to ensure that they comply with national policy. I hope that noble Lords will be reassured that there is consistency in Article 4 directions that is ensured by the statutory process, policy and guidance. The Secretary of State exercises his power to intervene where there are clear reasons to do so, and in a consistent and measured way. With these reassurances, I hope that noble Lords will agree that Amendment 312J is not necessary.

To conclude, I hope that I have said enough to enable my noble friend Lord Northbrook to withdraw his Amendment 312 and for the other amendments in this group not to be moved when reached.

[Lord Northbrook (Con)]

My Lords, I listened carefully to the Minister’s reply. I should like to say straightaway that I applaud the useful overall relaxation in permitted development rights. I take her point and that of my noble friend Lord Bellingham that there could be problems in high streets with my proposed permitted development BB1. I still believe that in residential areas it is important to propose change. I am noting some support from the Benches opposite. I should like maybe to recraft the amendment so that perhaps residents’ associations could have a say in residential areas.