Housing and Planning Bill (Seventeenth sitting)

Chris Philp Excerpts

Thursday 10th December 2015 Public Bill Committees

[Dr Blackman-Woods]

I beg to move, That the clause be read a Second time.

The new clause would apply to all new homes for sale given planning permission by local authorities, as well as those given permission in principle, under provisions in the Housing and Planning Bill. The new clause would give local authorities the power to require a proportion of new homes for sale to be marketed exclusively to local first-time buyers for a specified period. Local authorities could make a judgment call about what proportion was reasonable. The new clause would allow the Secretary of State or, in Greater London, the Mayor of London, to make reasonable definitions of the time period for exclusive local marketing and to make definitions of what “local” means.

[Chris Philp (Croydon South) (Con)]

I entirely agree with the hon. Lady’s desire to encourage first-time buyers. Does she not agree, though, that the starter home provisions that we agreed some weeks ago will go a very long way towards doing that?

[Dr Blackman-Woods]

What the new clause is designed to do, which I think the hon. Gentleman has probably realised—I am not totally sure—is to ensure that where new homes are available, they go to local people. There would be a period of time during which they were marketed to local people. This is particularly a London issue, and I will go on to talk about why it is so critical in London.

In many parts of the country, local first-time buyers compete for new homes with second-home buyers and buy-to-let investors. There is wide concern that the problem affecting first-time buyers is growing and that something needs to be done. The director of research at Countrywide was reported in the Daily Express as saying that

“landlords and first-time buyers are now in direct competition because they tend to look for homes that are smaller and cheaper than average.”

The trend has been confirmed by the mortgage search tracker from Mortgage Advice Bureau, whose data in November showed that the number of buy-to-let landlords searching for mortgages on cheaper properties was up 17% on the same quarter last year.

The property website Rightmove was reported in The Guardian in October as saying:

“First-time buyers are facing asking prices almost 10% higher than a year ago because of demand from buy-to-let investors”.

In February 2015, the rural housing policy review, chaired by Lord Richard Best and sponsored by Hastoe housing association, recommended that, in areas of high second-home ownership, the Government should require

“a proportion of new…homes granted planning permission…to be with the condition that they can only be used as principal residences.”

There are, as we know, particular impacts in London from the non-availability of homes for first-time buyers. In London, the problem of first-time buyers being squeezed out is particularly acute, with high proportions of new homes sold to investors, including off-plan overseas investors.

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[Helen Hayes]

I agree with the hon. Gentleman that this is an investment. It is, however, an investment that many local authorities do not have the luxury of being able to make in the context of the stretching of their resources across other very important statutory areas of service.

I will complete the quotation from London Councils:

“Full cost charging could also be used to fund the kind of pro-active multi-borough teams that supported”

the work of the Olympic Delivery Authority. Where we have large-scale regeneration across a wide area, London Councils supports the principle that local authorities should share that resource and be able to recoup the costs of it.

The new clause makes sense for councils, who would be able to raise the resources that they need without jeopardising vital statutory services such as children’s and adults’ social care; for communities, who will get higher-quality decisions; and for developers, who will get the speed of service they need to bring forward development. I hope that the Government will support it.

[Chris Philp]

It is an exquisite pleasure to serve under your chairmanship, Mr Gray. I shall be extremely brief.

Again, I draw Members’ attention to my entry in the Register of Members’ Financial Interests. I spent the past five years financing developers, and must say that they commonly complain that local authority planning departments are both insufficiently resourced in terms of the number of people they employ and inadequately resourced in terms of the quality of those people, because so many move into private practice.

I fully accept the points, made in interventions by my colleagues on the Government Benches, that local authority planning departments should be made more efficient by sharing services and, as my hon. Friend the Member for Peterborough said, that local authorities enjoy financial benefit when development takes place, but I do know that developers would, in principle, be prepared to pay higher fees in exchange for better levels of service, which they can currently do via agreements for larger schemes. There might be some concern that local authorities would simply take the extra fees and spend them on something else, so will the Ministers consider whether in future local authorities could be permitted to charge a specific higher fee in exchange for a guaranteed service level? If that service level was not delivered, the fee could be refundable so that there would be a direct and explicit link between the fee and the service. I understand, though, that this is a complicated subject area and there are views on both sides.

[Peter Dowd]

I am exquisitely pleased that you have given way on that point.

[Peter Dowd]

That the hon. Gentleman has given way.

Here we go again with the issue of localism. The bottom line is that, whether we like it or not, we are going to have to trust local authorities to make decisions and deliver. The new clause would just give us the ability to make those decisions in the best interests of the local area. I do not like the idea—through you, Mr Gray—of Ministers yet again saying one thing and doing another.

[Chris Philp]

It is reasonable to want to ensure that developers are not simply treated as cash cows and penalised with unlimited fees, which is why I was suggesting that the Ministers might in future consider a fixed-fee schedule related to specific service delivery, with the extra fees being refunded if that delivery is not made. Having uncapped fees so that developers could simply be bled dry would be a retrograde step.

[Helen Hayes]

The text of the new clause is explicit in saying that the schedule of charges should be set in a transparent way. To my mind, that would include setting out the level of service that would be expected to be delivered, as well as the full cost of that service, and undertaking consultation with the wider development industry prior to setting the schedule of charges. I hope that answers the hon. Gentleman’s point.

[Chris Philp]

Before one could sign up to the new clause, one would want to see the detail, which clearly is not there. I think I have made my point in general terms.

[Dr Blackman-Woods]

I have been momentarily knocked off track by the hon. Gentleman’s final comments. We have been debating most of the Bill without the detail we need because most of it is coming in regulations, so I hope he will address those comments to his Ministers.

I rise to support new clause 24, which was tabled by my hon. Friend the Member for Dulwich and West Norwood, and to speak briefly to new clause 31. The hon. Member for Croydon South might want to think about why so many planners from local authorities are leaving to join the private sector, because that used not to happen. It is a fairly recent phenomenon that so many local authority planners have been moving on. The reason is that local authority planning departments are in a very, very pressed situation, with reduced resources, greater pressure and increasing insecurity because they do not know when the next round of Government cuts is going to mean that they will lose their job. The only way to address that is to resource local authority planning departments properly—something that developers speak to me about all the time.

If the hon. Member for Peterborough is upset by the Local Government Association backing my hon. Friend’s new clause, he will be even more upset by the fact that the District Councils Network has come out very strongly in favour of the idea that there should be some cost recovery at a local level:

“Having a system where Whitehall dictates to local councils what planning fees they can charge is very unfair for local taxpayers around the country who are left paying the shortfall where fees don’t cover costs. Letting councils set their own fees is a much fairer system for both the applicant and the local taxpayer and will ensure there is flexibility in the system to recover the actual costs of applications.”

In 2010, a major review, which was instigated by the last Labour Government, was carried out of how local planning fees should operate. Instead of bringing forward a plan for the localisation of planning fees, as had been suggested throughout the consultation exercise before 2010, the Government merely revised the fee levels in 2012. That did not carry with it the degree of localism that we all wanted to see. As my hon. Friend has pointed out, London Councils has stressed that point recently, because of the impact of the increasing number of planning applications that local authorities are having to deal with, particularly in the London area:

“We believe the government should localise fee setting and scheduling controls so as to support boroughs that commit to boost the supply of housing. This would produce a more effective, swifter and consistent planning service, and ensure a properly resourced and more efficient planning system in the context of development control in London having seen an estimated net shortfall of around £37-£45 million annually”.

London Councils has stated that,

“if planning fees for large scale housing regeneration projects were charged on a full cost recovery system enabling councils to meet all 13 week planning targets, this would save developers up to £486 million per year in delayed development costs, while adding only £65 million in planning fees. Full cost charging could also be used to fund the kind of pro-active multi-borough teams that supported the work”

of the Olympic Delivery Authority. Developers, the LGA, London Councils and the District Councils Network —more or less everyone involved in the planning and development system—think that local authorities should be able to set planning fees locally, but the Government do not. We can find no rationale for that. The District Councils Network has helpfully set out for the Government some principles that could be applied.

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[Mr Thomas]

I beg to move, That the clause be read a Second time.

The new clause would require proposals to change offices in London into homes to go through a planning application process. Greater London has been particularly badly affected by the introduction of permitted development rights for those wanting to convert office accommodation into residential dwellings without seeking planning permission. There is a significant difference between office and residential values, which, combined with the high demand for housing and the scarcity of land, has created big incentives for landlords to convert, without planning permission, viable and occupied offices into homes. London Councils estimates that between May 2013 and April this year, at least 100,000 square feet of office floor space was lost. It argues that one consequence of that had been to drive up office rents in some parts of London, increasing costs for businesses; hon. Members know about all the implications of that.

London Councils has expressed concerns about the impact of the provisions on affordable housing in such developments. Because developers do not have to go through section 106 agreements when offices are converted into flats, there is no requirement to provide any affordable housing. London Councils estimates that some 16,000 new dwellings have avoided the full planning process and, as a result, many affordable homes that could have been built, had a planning application been required, have not been built. The LGA and London Councils have argued for change, and they support the intent of the new clause.

[Chris Philp]

Does the hon. Gentleman agree that the permitted development rights legislation has enabled the creation of thousands of new units in London, which have all been very affordable? What would he say to the thousands of Londoners who have been able to buy relatively cheap flats using that excellent provision?

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[Mr Thomas]

Absolutely not. I am simply saying that when there is a proposal to convert a big office block into residential accommodation, it is sensible to consider the full impact on the local community, both the benefit of the conversion to housing and the effect on jobs and businesses. The Opposition are pro-business, particularly pro-small business, and I am surprised that the Government want to damage the business communities in the boroughs in my examples.

In that spirit, I gently suggest to Government Members that the new clause would not stop conversions from office use to residential accommodation, but it would allow proper discussions to take place about the benefits and the balance between business and housing need.

[Chris Philp]

Does the hon. Gentleman agree that article 4 directions can address the hon. Gentleman’s concern about that balance? Local authorities can exclude town centre areas, for example, from the provisions, as many London boroughs have. Islington, Richmond and I think Southwark and Croydon, actually, have all done that.

[Mr Thomas]

The hon. Gentleman makes an interesting point about the degree to which the exemption process is working. London Councils has pointed out many other examples of where local authorities have sought exemptions, such as those he describes, but have been rejected.

[Chris Philp]

Typically where they have been unreasonable by requesting whole-borough exemptions, which have been quite rightly turned down.

[Mr Thomas]

With respect, I do not think that is accurate. The hon. Gentleman is perhaps rushing to read the Whip’s script a bit too quickly.