Levelling-up and Regeneration Bill (Twenty Fifth sitting)

Dehenna Davison Excerpts

Committee stage
Tuesday 18th October 2022 Public Bill Committees

[The Parliamentary Under-Secretary of State for Levelling Up, Housing and Communities (Dehenna Davison)]

It is a pleasure to serve under your chairmanship, Sir Mark. I am grateful to the hon. Member for South Shields for raising this matter. As MPs for the north-east, we are acutely aware of the value of manufacturing. She referred to her manufacturing powerhouse, which the north-east certainly is. We want it to continue to thrive, but we also want the entire UK to thrive when it comes to manufacturing.

Manufacturing is vital to levelling up as it provides high-skilled and well-paid jobs. It is supported by the Government, including through a new £1.4 billion global Britain investment fund, with grants to encourage internationally mobile companies to invest in the UK’s critical and most innovative industries.

There are already publicly available official statistics covering matters in the new clause, such as the number of manufacturing jobs by region. We are a little concerned that the new clause would require an additional and disproportionate burden on businesses to collect data in a timely manner at a time when they are already facing unprecedented rising costs, which are particularly acute for manufacturing businesses. We therefore feel that the new clause is unnecessary at this stage.

The hon. Member for Westmorland and Lonsdale talked about having real metrics at the heart of levelling up, which the Government are certainly passionate about. We want to be able to measure levelling up to show that we are successfully delivering it. That is why we are already taking steps to improve the quality of the spatial data that we have available.

My Department has established a new spatial data unit to drive forward the data transformation required in central Government. The unit supports the delivery of levelling up by transforming the way the UK Government gather, store and manipulate sub-national data to underpin transparent and open policy making. On that basis, I think we are reaching for the same end here. I reassure the hon. Member for South Shields that the spatial data unit will be pivotal in this matter. The Department for Education is also working to deliver a better understanding of local area skills demand and supply through its unit for future skills.

[Mrs Lewell-Buck]

I referred to the fact that the Government’s technical annex to the White Paper identifies an issue with measuring and understanding pay, jobs, living standards and productivity. If the Government do not want to put an extra burden on businesses, who will they ask to get this data for them? How will they do that?

[Dehenna Davison]

This is a matter for our excellent new spatial data unit, which is doing valiant work. It will really help us to understand the scale of the challenges, as well as the progress that we are making against the levelling-up missions. As a Government, we are determined to level up and make progress against those missions.

We are doing a lot of great work in this area and the spatial data unit really will be revolutionary in how we gather this data. For the reasons I have outlined, I ask the hon. Lady to withdraw her new clause.

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[Ben Bradley (Mansfield) (Con)]

It is a pleasure to serve under your chairmanship, Sir Mark. I want to give the Committee a change of scenery for five minutes, before I let somebody else speak. I will not develop these points; I will just add a thought that the Minister might wish to take away and consider in further conversations.

The Bill will, I hope, create numerous mechanisms and levers to incentivise local areas to bring forward brownfield sites, not least development corporations, combined authorities and the investment zones that have been the subject of much conversation. I should declare an interest, because I am the leader of a local authority and I am involved in a devolution conversation in the east midlands. At a regional level, we have been given funding to bring forward brownfield sites for development, and we are considering how we might use that funding locally to achieve this goal. Perhaps the Minister might consider whether some of the levers, funds and opportunities that my hon. Friend the Member for Buckingham has proposed would sit better at a devolved, local level within one of the mechanisms created by the Bill, rather than in the Bill itself.

[Dehenna Davison]

It is a pleasure to speak to this amendment from my hon. Friend the Member for Buckingham. We have done some great work on it together, and I hope we can continue in that spirit. Members will know that the Government strongly encourage the use of brownfield land over greenfield, and in national policy there is an expectation that local planning policies and decisions will give substantial weight to the value of using suitable brownfield land to meet our communities’ housing needs and other identified needs.

My hon. Friend was right to highlight the cost differential that developers face. We are investing significant funding to support brownfield development, including in some of the schemes that he has mentioned. I will rattle through them one more time for the Committee’s benefit. There is the £550 million brownfield housing fund and the £180 million brownfield land release fund 2, which builds on the success of the £75 million first brownfield land release fund. In addition, later this year we aim to launch the £1.5 billion brownfield, infrastructure and land fund, which will unlock sites around the country.

We are particularly sympathetic to this cause, which is why we are setting out a range of new measures and powers in the Bill to support brownfield development. My hon. Friend the Member for Mansfield is right to talk about local empowerment—something that I know he is a real champion of in his other role, at local government level. We are keen that the Bill in its entirety will empower local leaders to regenerate towns and cities through a range of provisions, including new locally led and locally accountable development corporations, which my hon. Friend mentioned, and support for land assembly and regeneration through enhanced compulsory purchase powers.

My hon. Friend the Member for Buckingham mentioned the infrastructure levy introduced in the Bill. It provides a framework in which, where increases in land value are higher—as is often the case with greenfield development—higher rates can be set. This mechanism would allow differential charging rates to be set by local planning authorities for different types of development, so that more could be levied on greenfield land as compared with brownfield land to incentivise development on that brownfield land.

We will also continue to work on wider planning proposals that will give the public an opportunity to shape our future national planning policy, and in relation to which the Government have committed to consult the public.

On that basis—because we are already taking such strong steps to encourage brownfield development and have a commitment to review national policy—we do not feel that the new clause is necessary, so I kindly ask my hon. Friend to withdraw it today.

[Greg Smith]

I very much welcome the Minister’s commitments. She is absolutely right in outlining the various schemes to support brownfield development. I guess the thought I will leave her with is the reflection that, rightly, there is a lot of carrot in those schemes; where I do not think we have quite enough at the moment is the stick to dissuade people from greenfield development. We need to ensure a proper balance of incentivising, through grant funding or whatever it might be, development on the brownfield sites, and also something to actively dissuade developers from looking at the greenfield sites. If we can carry that conversation on through to Report, I am content to withdraw new clause 23 at this time. I beg to ask leave to withdraw the motion.

Clause, by leave, withdrawn.

New Clause 24

Report on measures to improve the efficiency of the housing market

“(1) The Secretary of State must, within 60 days of the day on which this Act is passed, establish a review of the merits of measures to improve the efficiency of the housing market.

(2) The review must, in particular, consider the impact of—

(a) a stamp duty exemption to encourage elderly homeowners to downsize,

(b) an additional stamp duty surcharge on purchases by person not resident in the UK,

(c) a stamp duty surcharge on second home purchases,

(d) a reduction in the highest rates of stamp duty, and

(e) measures to promote an active market in long-term fixed rate mortgages to encourage lending to first time buyers.

(3) The Secretary of State must lay a report on the findings of this review before Parliament no later than one year after this Act comes into force.”—(Greg Smith.)

This new clause would require the Secretary of State to review the merits of measures to improve the efficiency of the housing market and to report the findings to Parliament.

Brought up, and read the First time.

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[Greg Smith]

New clauses 25 and 26 are quite important to free up for good use properties that may have fallen into disrepair or been unoccupied for a long time. I am sure that we could all name properties in our constituencies that we have canvassed for five elections running but nobody is ever behind the door. We put leaflets through the door, but the post reaches almost as high as the letterbox itself. Those are homes that I hope all Members, of whatever political persuasion, would acknowledge really should not be sat empty, but should have a family or whoever living in them. Of course, the wider public good is also served by not allowing properties to fall into disrepair and become eyesores or perhaps hotspots for disorderly behaviour, as people seek to take them over illegally.

New clause 25 does not contain specific legislative measures to deliver the outcomes we are seeking, but it creates a duty on DLUHC to report on how better to ensure that empty properties that have fallen into disrepair and are perhaps causing other public health hazards can be more easily brought back into the housing supply chain for social rent, for part rent, part buy, for discount market housing, or for whatever it might be.

New clause 26 is about ensuring that the compulsory purchase powers available to local authorities are suitable, if I may put it in those terms, to enable them not just to get those properties back into productive use and put a roof over human beings’ heads, but to ensure that local authorities that often bang their heads against a brick wall when it comes to certain compulsory purchase powers are freed up to make the right decisions for the communities they represent.

[Dehenna Davison]

I completely agree with the sentiment behind these new clauses. We can probably all think of examples in our constituencies of the sorts of vacant properties that my hon. Friend mentioned. Indeed, I was out in Eldon Lane with neighbourhood wardens, local police and local councillors—I think last week or the week before—looking at streets where most of the houses sit empty and can become hotbeds for antisocial behaviour and petty crime, so this is certainly something we want to tackle.

I agree with the benefits of promoting development in areas that are already developed, but I do not think that new clause 25 is necessary. We have already debated the Government’s national planning policy framework, which promotes the development of previously developed land and makes it clear that local plans should also include sufficient provision for affordable housing. I share the interest in novel ways of increasing the supply of affordable housing. The Government’s affordable housing guarantee scheme is a good example of this kind of innovation. The same is true of the proposal in the Bill to secure affordable housing contributions in future through a new streamlined mandatory and locally determined infrastructure levy.

My hon. Friend also made the case for housing associations to purchase homes that are empty or not currently fit for human habitation. I agree that this can play a valuable role in expanding the availability of affordable housing and improving the overall quality of our housing stock. Local authorities and other social housing providers can access funding to acquire empty homes on the market and bring them back into use through programmes such as the affordable homes programme and the rough sleeping accommodation programme.

Briefly, on new clause 26, I strongly share my hon. Friend’s desire to ensure that the compulsory purchase system is fit for purpose and can play its part in delivering our levelling-up agenda. My officials have worked incredibly closely with key stakeholders to review the current system and develop the package of measures in the Bill. We believe that these measures, supplemented by improved and updated guidance, will together ensure that local authorities have the powers they need to bring forward the regeneration of their high streets and town centres, and to deliver much needed housing and infrastructure. We also believe they will deliver a faster and more efficient compulsory purchase system and make compensation simpler and clearer. I have also asked the Law Commission to undertake a review and consolidation of the existing legislation on compulsory purchase and land compensation, which will begin shortly.

On that basis, I hope that my hon. Friend will agree that a statutory review is not necessary and ask him to withdraw the new clause.

[Greg Smith]

On the back of those commitments, I am happy to withdraw the motion.

Clause, by leave, withdrawn.

New Clause 27

Deliberate damage to trees linked to development

“(1) Section 210 of the Town and Country Planning Act 1990 (penalties for non-compliance with tree preservation order) is amended as follows.

(2) After subsection (4) insert—

‘(4AA) Subsection (4AB) applies if—

(a) the court is considering for the purposes of sentencing the seriousness of an offence under this section, and

(b) the offence was committed for purposes connected to planning or development.

(4AB) The court—

(a) must treat the fact mentioned in subsection (1)(b) as an aggravating factor (that is to say, a factor that increases the seriousness of the offence), and

(b) must state in open court that the offence is so aggravated.’”—(Greg Smith.)

This new clause would make damage to trees or woodland in contravention of a tree preservation order an aggravated offence if it was committed for purposes connected to development or planning.

Brought up, and read the First time.

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[Tim Farron]

The two new clauses are about trusting local communities. We are not saying that every meeting must be held virtually, but that local authorities—in this case, planning authorities—should have the power to do so, and for good reason. My preference is for in-person meetings, but for the reasons that have been set out, especially by the hon. Member for Buckingham, local authorities should have that power.

Every part of my patch is parish. There are 67 parishes, and some of them are bigger than most Members’ constituencies and have not very many people living in them. To get from one end of the Lakes parish to the other, people have to pass three or four lakes. We should consider the age profile of some of the members of the parish councils and the distances involved. I said earlier that it rarely rains in the lakes, but occasionally it might. It certainly gets dark at certain times of the year. On a wet November night, holding a meeting on screen rather than physically is probably safer and better for everybody. Let us trust communities to make those choices on the go, and not impose.

The pandemic has been a traumatic and formative experience for us as a culture, as a society and as representatives of the people. We have learned many lessons, and some of them we should carry on with. I was disheartened and disappointed that some members of the Government seemed to be almost determined, as a point of principle, to close down any virtual operation of democracy during the pandemic—never mind at the end of it. It is encouraging to hear a cross-party outbreak of common sense today. It would be great if the Government listened.

[Dehenna Davison]

As a millennial Minister who is used to swiping and not to turning pages, Members might expect me to say that I prefer virtual meetings, but actually I do not. In-person meetings and the social element are important, yet we saw the value of virtual meetings during the pandemic, at the time when we needed them most. Hon. Members will remember the powers granted through the Coronavirus Act 2020, which allowed local authorities flexibility on remote and hybrid meetings, in certain circumstances. They will also know that those regulations expired back in May 2021. Since that date, all council meetings have had to be in person. The new clauses lean into the terms of those previous provisions and seek to replicate them on a permanent basis, but only for planning committees. I heard the points made by my hon. Friend the Member for Mansfield.

Looking beyond the circumstances of the pandemic, the Government considered that there may be benefits to permanent provisions for remote meetings, and that local councils may be keen to have the flexibility to use that provision as they see fit. I have been lobbied by a lot of my local parish councillors on the benefits that remote meetings can bring.

As my hon. Friend the Member for Mansfield highlighted, the Government conducted call for evidence last year to test the views of those who had participated in and experienced councils’ remote meetings to inform our decision on this matter. I thank the shadow Minister, the hon. Member for Greenwich and Woolwich, and the hon. Member for Westmorland and Lonsdale for their points on trust in local governance and local planning, which we all agree is paramount. Increasing participation is only ever a good thing.

The Department has considered the responses to the call for evidence and we have been weighing the benefits, which hon. Members have highlighted, against views that physical attendance remains important to deliver good governance and democratic accountability. I take on board the point made by my hon. Friend the Member for Mansfield about the investment in the technology that a lot of local authorities had made, which must also be taken into account.

I genuinely thank my hon. Friends for tabling the new clause, but we need to first consider the call for evidence. We will issue our response, which will set out the Government’s intentions. I ask for a tiny bit more patience and for the new clause to be withdrawn.

[Greg Smith]

The self-styled millennial Minister makes the commitment. Asking for slightly more time seems reasonable to me. However, if we are to be true to localism, I would double-underline and highlight the need to ensure that local people are able to participate in proceedings. Just as we can still have a witness virtually at a Select Committee in this place, councils should have the discretion to use virtual proceedings, to maximise participation locally. I beg to ask leave to withdraw the motion.

Clause, by leave, withdrawn.

New Clause 29

Local authorities to be able to raise planning fees to cover costs including planners

“(1) Section 303 of the Town and Country Planning Act 1990 (fees for planning applications etc.) is amended as follows.

(2) After subsection (5) insert—

‘(5A) Regulations made by the Secretary of State under this section may provide for local planning authorities to vary fees or charges under this section payable to the local planning authority to cover the reasonable costs of their exercise of planning functions.

(5B) In subsection (5A), “reasonable costs” includes the employment of qualified planners.’”—(Greg Smith.)

This new clause would enable the Government to allow local planning authorities to vary planning fees and charges to cover their costs relating to planning, which could include the employment of qualified planners.

Brought up, and read the First time.

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[Rachael Maskell]

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

It is a pleasure to move the new clause and to give the hon. Member for Buckingham some respite. The new clause relates to fiscal responsibility in local government. Without proper viability being sought, local authorities can pay millions of pounds on projects and never reap the return. That is why the new clause relates to capital investments and economic appraisals, which should be undertaken and understood, but without a Green Book-style appraisal, local authorities can end up paying and developers and landowners gaining, with ultimately no reward and benefit to the local community. The new clause is designed to ensure that the finances on any project are transparent and for the benefit of local people. It would ensure that there is gain for all and not ultimate loss, not least given that we are talking about the use of public resources. That is why the new clause is important.

The case study to which I want to refer particularly is that of the York Central site. The cost of bringing that site forward is now believed to be £200 million of public funding. As that project moves forward, more and more is being demanded from public sources to fund it, and yet the local authority may never see a return on that investment. City of York’s infrastructure investment was planned to be around £35 million, but it has now been given an estimated debt cost of £57 million based on April interest rates, which will clearly be significantly higher now.

The Department for Levelling Up, Housing and Communities has also put in £77 million and it is believed that more than £50 million will have to come through the Mayor’s budget once it is approved and in place—we are expecting that to be in 2024. In a briefing, councillors were told that the council would need to put in £85 million and debt costs to fill the gap, but we could now be talking about nearer £100 million rather than the £35 million once rejected. As a result, it is necessary to weigh up the viability of the site not for the developers, as set out, but for the local authority. It is that check that is not required for such a project today, but it is really important, not least because local authorities simply do not have the necessary margins and, as a result, have to cut back on vital services to fund such capital projects.

My amendment therefore calls for prudence. On sites where any capital investment over the value of £2 million is made, there must be an economic appraisal commissioned and then published assessing the financial viability of the site to the authority. York Central has been developed for housing, so it will not reap the opportunities that a larger business owner could bring in nor those to do with council tax, as most of the properties being developed will be for investment, not for local residents to live in. They will either be empty units, leading to a cost to our city, or will be turned into Airbnbs, a matter that I will turn to later. Of course, Airbnb falls under the thresholds of flipping the property, not paying council tax and not paying business rates either, so the local authority loses millions of pounds as Airbnbs dodge the system.

At a time of significant austerity in local government, it is crucial that more scrutiny is given to the costs it has to expend on sites. My amendment simply calls for proper governance over finances and, at a time when the whole nation is looking at how Governments at all levels are more prudent with the spending of their money, it is right to bring forward such a measure to ensure that public money is spent in a way that will see its return and will be for the benefit of the people, not the developers and landowners who ultimately gain from such development.

[Dehenna Davison]

I am grateful to the hon. Member for York Central, who always talks incredibly passionately about her constituency. I thank her for bringing her experience of the capital project she mentioned to the Committee. As a Conservative, my ideology tells me that ultimately we always need to get best value for taxpayers’ money.

The Government recognise the importance of local capital investment for economic growth, improved public services and meeting our priorities, such as on housing delivery. That is why we need a robust system that supports the benefits of local decision making and allows sensible investment while safeguarding taxpayer’s money and protecting the local government finance system. Unfortunately, in recent years a small minority of local authorities have taken excessive risks with taxpayers’ money; they have become too indebted or have made investments that have ultimately proved too risky. That is why we need to ensure that the system is fit for purpose.

The changes made through clause 71 provide a flexible range of interventions for the Government to investigate where capital practices may have placed financial sustainability at risk and to take steps to remediate issues if necessary. We think that that is sufficient to address risk.

We have recently taken a number of steps to improve the transparency of local authority capital investment and borrowing. Last year we completed our data survey, which is designed to extract new data from local government and fill our identified information gaps. As of February 2022, we amended our regular statistical returns to obtain more detailed data on local authority investment activity. That will provide the Government with the clarity they need on the performance of investment assets as well as the location and risk management of investment properties.

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[Rachael Maskell]

I am grateful for the Minister’s contribution. However, will she acknowledge that even if the viability of a site stands up, some of the investors in it may not? What ultimately happens is that local authorities become the backstop for financing and have to fill the gaps in order for those sites to be brought forward. As a result, the benefit goes to the developer and the risk sits with local authorities.

[Dehenna Davison]

I have certainly heard what the hon. Member has said, and we all have examples from our own constituencies and authorities. The current legislation and statutory codes allow local government to appraise risks as they stand. Alongside that, the monitoring and provisions that we are seeking through clause 71 will provide central Government with assurance. We think that the new clause is unnecessary, and I ask the hon. Member to withdraw it.

[Rachael Maskell]

I am grateful to the Minister for giving way again. Reflecting on the example that I gave, will she say how her Department would scrutinise the funding of sites such as the one in York Central to assess the viability of the local authority’s having to make increased contributions? Has the Department done that?

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[Dehenna Davison]

I will be happy to follow up with the hon. Member on that point in writing.

[Rachael Maskell]

I thank the Minister for her response, but I am not satisfied that what she says will be sufficient to ensure that there are safeguards on local public resourcing that is brought forward on a site, particularly one as important as the York Central site, where eye-watering sums of money are being spent. I will therefore read with care what she writes to me to see whether there are sufficient safeguards. If I am not satisfied, I will want to return to this issue at a further stage of the Bill, but for now I beg to ask leave to withdraw the motion.

Clause, by leave, withdrawn.

New Clause 38

New use classes for second homes and holiday lets

“(1) Part 1 of Schedule 1 of the Town and Country Planning (Use Classes) Order 1987 (S.I. 1987/764) is amended as follows.

(2) In paragraph 3 (dwellinghouses)—

(a) for ‘whether or not as a sole or’ substitute ‘as a’, and

(b) after ‘residence’ insert ‘other than a use within Class 3B)’.

(3) After paragraph 3 insert—

‘3A Class C3A Second homes

Use, following a change of ownership, as a dwellinghouse as a secondary or supplementary residence by—

(a) a single person or by people to be regarded as forming a single household;

(b) not more than six residents living together as a single household where care is provided for residents; or

(c) not more than six residents living together as a single household where no care is provided to residents (other than a use within class C4).

Interpretation of Class C3A

For the purposes of Class C3A “single household” is to be construed in accordance with section 258 of the Housing Act 2004.

Class C3B Holiday rentals

Use, following a change of ownership, as a dwellinghouse as a holiday rental property.’”—(Tim Farron.)

This new clause would create new class uses for second homes and short-term holiday lets.

Brought up, and read the First time.

Question put, That the clause be read a Second time.