Growth and Infrastructure Bill

Baroness Valentine Excerpts

Tuesday 8th January 2013 Lords Chamber

[Baroness Valentine]

I declare that I am chief executive of London First, a not-for-profit membership organisation that seeks to make London the best city in the world in which to do business. I am also a board member of Peabody housing trust. Wearing both hats, I have a strong interest in the efficacy of the planning system.

Too often, planning is seen by both those seeking approval for schemes and those charged with considering them as a confrontational process, in which one side wins and the other loses. This ignores the fact that good-quality new developments benefit both the developer and the local economy. As investment in infrastructure is a key to economic growth, I am also keen to see a constructive approach being taken to other areas such as utilities, on which I will touch later.

In forming my views on the Bill I had useful conversations with the Department for Communities and Local Government, with the Greater London Authority and with local authorities, as well as with developers and utilities. From those discussions, it is clear to me that the Bill contains some very welcome measures. In particular, I welcome the proposals that enable the Planning Inspectorate to step in where the local authority has a track record of consistently poor performance in the speed or quality of its decisions.

In London, of course, the mayor has a specific responsibility for strategic planning, supported by a well respected team with established relationships with all relevant stakeholders. It seems that, as the noble Lord, Lord Tope, suggested, it would make sense for London referrals to be made to the Greater London Authority, allowing the Planning Inspectorate to focus on areas of the country without such arrangements. This would surely be in keeping with the spirit of the localism agenda. However, no matter where it is used, this is a significant power, so we should be careful about how we designate an authority as “poorly performing”.

In its consultation on the relevant criteria, the DCLG suggests a focus on the speed with which decisions are taken on major planning applications and the proportion of decisions that are subsequently overturned on appeal. These are important metrics but they miss two further sources of delay: on minor applications and on the discharge of planning conditions. Minor applications such as changing the frontage of a small shop may appear to be relatively trivial, but the cumulative economic impact of delays can be significant. The risk is that short-staffed local authorities will prioritise major applications at the expense of processing minor ones. That, surely, cannot be the Government’s intention. Likewise, there is no point in having a speedy resolution of the planning application if it is followed by procrastination over the discharging of planning conditions. I urge the Government seriously to consider these two important further metrics.

I now turn to the difficult economic climate in which development has taken place over the past few years. There is often a considerable delay between an application being approved and the first shovel in the earth, during which time market circumstances can change. In such instances, local authorities have the ability to modify Section 106 agreements in order to make sure that the development they want goes ahead. However, a recent Local Government Association survey has shown that only one-third of respondents did so over the past two years, despite the deterioration in the economic climate. This lack of action has led to the stalling of perfectly good schemes, which have taken affordable housing and other amenities with them and have also contributed to the dire situation in the construction industry. I therefore welcome the provisions in the Bill which recognise the need for planning to take more account of changing market conditions and which allow for the renegotiation of planning requirements to make schemes viable.

In London I would advocate the mayor having the power to call in major schemes where the local authority has been notified of a Section 106 modification. This would ensure that London’s strategic needs are taken into account while maintaining democratic accountability in the capital, consistent with localism. Similarly, the Government need to ensure that the cumulative burden of the various levies that planning authorities can impose do not prevent development. This is a particular issue around the new Community Infrastructure Levy in London, because both the mayor and the boroughs can impose their own separate charge. A safeguard is needed so that this double-dipping does not stop growth. The mayor has proposed that he should have the power to ensure that any proposed borough levy is consistent with the growth objectives in the London Plan. I would support such a measure. This power should apply to planning applications not only for buildings but also for other strategic infrastructure such as power supplies. I urge the Government to include energy infrastructure on the list of new developments that should be referred to the mayor where they are of strategic importance to London as a whole, rather than to only one borough.

Unblocking planning obstacles is, however, only part of the equation. A recurrent concern is that energy infrastructure struggles to keep up with demand. For example, as Land Securities Group has found in its major development around Victoria station, developers often find that connecting new buildings to the grid is expensive and slow because existing infrastructure is already operating at capacity. At the root of this problem is a regulatory framework that discourages the distribution company from investing ahead of need. Imagine if every time you bought an electrical item you had to wait for a new power socket to be installed at home before you could use it. In effect, this is the problem that developers face. The difficulty of getting connected to the power supply is considered by many to be one of the top three risks when bringing forward schemes. The regulator, Ofgem, should address this, so that the distribution company can build more infrastructure in areas of intense business activity such as central London, in anticipation of high demand. This way, new development would be able to “plug in and play” rather than suffer sometimes years of delay.

Staying with infrastructure, I welcome Clause 8, which is intended to support the rollout of high-speed fibre broadband. In the 21st century, provision of broadband is as vital as access to water and power for both businesses and homes. It is good to see that such things are recognised as essential infrastructure and that their contribution to growth is acknowledged.

Finally, I will recommend a structural change that would cost the Government nothing but which could have an enormous impact on the efficiency of the planning process: that is, giving local authorities the freedom to charge businesses the real costs of considering planning applications. At the moment, local authorities charge fees according to a government schedule rather than to the costs they incur. This means that at times of acute financial stress, authorities cut their planning resources. This is one major reason why some authorities are poor performers. Poor and variable advice from inexperienced officers can add substantial delays and costs. Most developers would prefer fees to be structured in a way that guarantees clear and consistent guidance rather than suffer the greater cost of a poor process. We should allow more flexibility to provide authorities with the resources commensurate with the task at hand.

In conclusion, I commented earlier that investment in infrastructure was a contributor to growth. In naming this the Growth and Infrastructure Bill, rather than the other way around, the Government might be accused of putting the titular cart before the horse—but I can live with that if the outcome is a thoughtfully integrated approach to planning that enables the two objectives to be met. I believe that the amendments that I suggested would support such an approach and help give the planning process a key role in delivering economic recovery, rather than being a bureaucratic and inflexible brake. I urge the Government to consider them.