Levelling-up and Regeneration Bill

Earl Howe Excerpts

Report stage
Wednesday 13th September 2023 Lords Chamber

Moved by

[Earl Howe]

225: Clause 120, page 152, leave out lines 21 to 26
Member's explanatory statement
This amendment removes subsection (4) of the new section 54A of the Planning Act 2008, being inserted by Clause 120, which contains a restriction on prescribed public authorities from charging fees where the advice, information or assistance is provided to certain excluded persons.

[Earl Howe (Con)]

My Lords, I shall speak also to the other 15 government amendments in this group. Amendment 225 to Clause 120 of the Bill, along with Amendments 226 and 227, are minor and technical. In developing NSIP applications, applicants are required to consult statutory consultees who provide expert advice to ensure that infrastructure is delivered in a way that supports our objectives, including those around enhancing the natural environment, public safety and protecting historic assets.

Clause 120 provides a power for the Secretary of State to make regulations to set up a charging regime for specific statutory consultees to recover their costs for the services they provide to applicants when engaging on NSIP applications. Our policy objective is to ensure that applicants should pay for advice from specific statutory consultees throughout the consenting process, and to support statutory consultees to achieve full cost recovery for their services.

Exemptions in subsections (4) and (6) of the new section inserted by Clause 120 were originally included to ensure that excluded persons were not liable for the costs of advice provided to them, so that regulations could make it clear that the applicant bears liability for such costs. However, through discussions with relevant statutory consultees, it has become clear that these subsections would also prevent applicants being charged where the Secretary of State engages with statutory consultees directly. Therefore, the clause would prevent specific statutory consultees recovering costs requested by an excluded person—even from applicants—in a timely way that supports faster decisions on applications for development consent.

To ensure that the clause delivers our policy aims, I propose that new subsection (4), and in consequence, a number of excluded persons defined in new subsection (6), be removed. The removal of these exemptions is required to achieve our original policy intention, whereby statutory consultees should be able to obtain full cost recovery for the provision of their services in relation to NSIPs, regardless of the person to whom those services are provided.

I now turn briefly to government Amendments 229 and 230. In Committee, we introduced an amendment to allow prescribed bodies named in regulations to charge fees for providing advice or information in connection with applications or proposals under the planning Acts, as defined in Section 336 of the Town and Country Planning Act 1990, which is now Clause 128 of the Bill. In Committee, the noble Baroness, Lady Parminter, eloquently set out on behalf of the noble Baronesses, Lady Young of Old Scone and Lady Hayman of Ullock, that the exclusion in new subsection (3)(b) on charging for advice provided to planning decision-makers could have the effect of inhibiting charging where applicants enter into a voluntary agreement with statutory consultees to provide advice or assistance as part of the planning application.

It is obviously not the intention of the power to disincentivise proactive and early engagement between applicants and statutory consultees or prevent statutory consultees charging where an applicant has voluntarily paid for a premium service—quite the opposite. On larger-scale proposals, there may be a need to have sustained and ongoing engagement with statutory consultees. So, as with the NSIP charging powers, we have listened and are making changes to address the issues raised. Through Amendments 229 and 230, we are changing Clause 128. These changes will have the effect of removing new subsections (3)(b) and (5), which provide for the exclusion. This should allay any concerns over the scope of our charging power and will allow us to work through the model of statutory consultee charging with the sector, through regulations. I should add that we have engaged with Defra, which sponsors Natural England, and the Environment Agency, and they see this amendment as a positive step forward.

All the other government amendments in this group, starting with Amendment 263A, are consequential to the marine licensing cost recovery powers. Clause 214 as introduced, which is now Clause 222, gave the Secretary of State new powers to make regulations which set the level of fees payable for post-consent marine licence monitoring, variations and transfers, where the Secretary of State is the appropriate marine licensing authority under the Marine and Coastal Access Act 2009. We are now extending those powers to Scottish Ministers, where the Scottish Ministers are the appropriate licensing authority under that Act in the Scottish offshore region, to avoid a legislative gap. In conclusion, the amendments are important as they remove any potential uncertainty as to the nature and scope of our cost recovery powers for statutory consultees and ensure that they can be made more effective. I beg to move.

[Baroness Young of Old Scone (Lab)]

My Lords, I will speak briefly to my Amendment 227A on an issue the Minister has already touched on: enabling statutory consultees, such as Natural England, Historic England and the Environment Agency, to charge both planning decision-makers and applicants for the advice they are required to give. That is, as the Minister noted, a valuable part of the planning system which supports the Government’s aspirations on growth and environmental sustainability.

Currently, this work is funded from statutory consultees’ ordinary budgets, and the growth in planning applications means that more and more money is drained from those ordinary budgets and away from their ordinary and very necessary work. The statutory consultees have tried to become as efficient as possible to cope, but the cost to them is now £50 million a year, and 60% of that is borne by Natural England and the Environment Agency. I declare my interests as a former chairman of Natural England’s predecessor and a former chief executive of the Environment Agency. In effect, that means that the planning system is operating with a hidden subsidy at the statutory consultees’ expense, with the major focus being on the planning proposals which present the greatest potential environmental impact due to their size and location—inevitably, those cost the most money for the statutory bodies to inquire into and report on.

As the Minister said, Clause 120 introduces charging for nationally strategic infrastructure projects, but it does not cover ordinary Town and Country Planning Act casework. I thank both Ministers, the noble Baroness, Lady Scott of Bybrook, and the noble Earl, Lord Howe, for their assiduity and flexibility in discussing that with me and others. They have made some limited concessions, but, at the end of the day, I ask the Government: why is there not a level playing field between Town and Country Planning Act casework and casework for nationally strategic infrastructure projects? That would resolve the issue for the statutory consultees.

--- Later in debate ---

The noble Baroness, Lady Pinnock, set out clearly some of the serious impact on planning departments and the noble Lord, Lord Young, referred to the apposite conclusion of the Levelling Up, Housing and Communities Select Committee. As he rightly pointed out, it is a principle of devolution—something that the Bill sets out to espouse—that councils must be able to do their own thing for charging fees. That would enable them to resource their planning departments properly. It seems that again the Government are more interested in protecting the pockets of developers than in protecting the public purse, so if the noble Baroness, Lady Pinnock, chooses to divide the House, she will have our support.

[Earl Howe (Con)]

My Lords, Amendment 227A in the name of the noble Baroness, Lady Young of Old Scone, seeks to impose a requirement on the Secretary of State to bring forward regulations under Clause 128 that will enable statutory consultees to charge applicants for their advice on planning applications and consents under the planning Acts. I appreciate that our Amendments 229 and 230 do not go as far as the noble Baroness, Lady Young, might like. However, given the complexity of statutory consultee charging—it is a complex field—in our view it would be unwise to rush into a radically different set of arrangements. The changes that she proposes have the potential to impose financial impacts on applicants, in particular home owners and SMEs, and they could severely affect local planning authority capacity and its ability to make timely decisions. We need to ensure that an appropriate balance is reached with any charging model.

To put that into context, there are around 28 statutory consultees prescribed nationally and around 50,000 applications a year that the big six national statutory consultees comment on. That does not include local statutory consultees, such as highways authorities. Therefore, we will need a system that works for everyone, not just a select few, and this will need to be worked through carefully and collaboratively with the sector. Against that background, I hope that the noble Baroness will see why we are reluctant to rush into the model that she proposes and that she will in fact decide not to move her Amendment 227A on that account.

Amendment 235, in the name of the noble Baroness, Lady Pinnock, would enable local authorities to set their own planning application fees. I understand how important it is for local planning authorities to have the resources that they need to deliver an effective planning service. On 20 July, we laid regulations, as she mentioned, that will increase planning fees by 35% for the major applications and 25% for all other applications. This is a national fee increase that will benefit all local planning authorities in England. In addition to the 35% increase, local planning authorities may charge fees for providing pre-application advice or using pre-planning agreements for major schemes. Fee levels for those services are set by individual local planning authorities. It is important to factor that point into noble Lords’ consideration of this issue.

The Government do not believe that enabling local planning authorities to vary fees and charges is the way to answer resourcing issues, for several reasons. First, it does not provide any incentive to tackle inefficiencies—indeed, the opposite is true. I am not sure that I heard that point addressed either by my noble friend or by the noble Baroness, Lady Pinnock. Secondly, I have to come back to the point that the Government argued in Committee. Having different fees between local authorities would be bound to create uncertainty and, perhaps more importantly, unfairness for applicants. We have to be cognisant of the need for fairness. It is all very well for my noble friend to say that applicants will not notice if fees vary between areas. It is a question of doing what is right for all parties and not just feeding the wishes of local authorities in this area, understandable as those are, as I said. Also, at an extreme, if fees are set too high, they could risk doing what I am sure the noble Baroness, Lady Pinnock, does not want, which is to discourage development coming forward in the first place. For those reasons, I am afraid that I must resist the amendment and I hope that, on reflection, the noble Baroness will be persuaded not to move it when we reach it.

[Baroness Pinnock (LD)]

Before the noble Earl sits down—I thank him for the reply—can he just confirm that the Government are willing for council tax payers to subsidise planning applications, which are often very big applications? That is often where the fee discrepancy occurs, with very big housing developments or commercial developments. Is the noble Earl happy for the Government to see council tax payers subsidising those planning applications?

[Earl Howe (Con)]

The noble Baroness’s question has a lot of hypotheses built into it. As she knows, local government funding is not just a matter of fees being charged and council tax being levied; there is of course support from central government as well. I suggest that it is very difficult to generalise in the way that she is asking me to. However, I say respectfully that she ought to remember too that local authorities can charge more for more complex cases, so there is flexibility in that sense.

Amendment 225 agreed.

Moved by

[Earl Howe]

226: Clause 120, page 152, leave out lines 31 to 39
Member’s explanatory statement
This amendment is consequential on the amendment being made to remove subsection (4) of the new section 54A of the Planning Act 2008, inserted by Clause 120, in the Minister’s name.

--- Later in debate ---

[The Earl of Devon (CB)]

My Lords, I had not expected to speak but this interesting debate has raised a couple of questions which maybe the Minister or the noble Baroness, Lady McIntosh, may address, particularly concerning Amendment 232.

I note that I am a member of the Wetlands APPG, so wetlands and flood plains are very close to my heart. I am also a member of the Devon Housing Commission so the cost and availability of housing in rural areas is very close to my heart too. There is a conflict here and I wonder whether Amendment 232 would have too big an impact on the availability and affordability of housing in areas near these floodplains.

I wonder whether the Minister or the noble Baroness, Lady McIntosh, if she sums up, can assist me on that point. I also wonder, given that we have just discussed the biodiversity net gain principle, whether we can apply that principle to building housing on these sensitive areas, such that if flood plains are being used up to create residential housing in essential areas, we look to invest in creating further areas for flood relief and landscaping to offset and ameliorate the problems created by building in these important areas where housing is required because it tends to be accessible and somewhat more affordable.

[Earl Howe (Con)]

My Lords, as we have heard, this group of amendments addresses a range of issues relating to water management and flood risk and I think it appropriate for me to begin by responding to Amendment 231, the first amendment in this group. I am grateful to my noble friend Lady McIntosh of Pickering for this amendment because it gives me the opportunity to tell the House that following publication of the review for implementation of Schedule 3 to the Flood and Water Management Act 2010 earlier this year, the Government are actively working on how best to implement Schedule 3.

An ambitious timeline has been set to deliver this quickly and that is why we have already committed to implementation in 2024 following statutory consultation later this year. I am sure my noble friend will understand how essential it is that we allow sufficient time to engage with stakeholders to help shape the details of implementation. Schedule 3 provides for a public consultation which must take place on the national standards. We have also committed to consult on the impact assessment and will need stakeholder views to inform decisions on scope, threshold and process in order to draft the secondary legislation required to implement Schedule 3. I hope that reassures my noble friend regarding her Amendment 231 and that, on that basis, she will not feel the need to press it.

Amendments 232 and 237 in my noble friend’s name would prevent planning permission for residential development in functional flood plains and high-risk flood areas and create a new duty for the Secretary of State to make building regulations within six months for property flood resilience, mitigation and waste management in connection with flooding. I listened carefully to what my noble friend and the noble Baronesses, Lady Pinnock and Lady Hayman, had to say. Let me explain where the Government are on this. Planning policy directs development away from areas at the highest risk of flooding. Building regulations set drainage system requirements for individual buildings and the main sewerage system is governed by the sewerage undertaker for the area.

As I said, I listened carefully to the arguments put forward but contend that the Government have well-established means of making sure that new developments are not approved where there is an unacceptable flood risk. I would argue that the Environment Agency and local authorities are the right bodies to oversee the maintenance of existing flood mitigation measures and, for these reasons, in our view introducing new requirements into the building regulations is not necessary.

New housebuilding—I hope I can reassure the noble Earl, Lord Devon, on this—and most other forms of development should not be permitted in the functional flood plain where flood-water has to flow or be stored. But it is important that local councils follow the sequential risk-based policy in the framework, steering new development away from areas known to be at risk of flooding—now or in the future—wherever possible. However, sometimes it is necessary to consider development in such areas. Banning development entirely in flood risk areas would mean that land that could safely be built on could no longer provide the economic opportunities our coastal and riverside settlements depend on. That is why I say to the House that we should trust our local authorities to make sensible decisions about what development is appropriate in their area. Having said that, we will of course keep national planning policy on flood risk and coastal change under review, as noble Lords would expect.

Amendment 236 would place a duty on the Government and local authorities to make data about flood prevention and risk available for the purpose of assisting insurers and property owners. Data about flood prevention and risk, including for planning purposes, is already publicly available, provided primarily by local authorities and the Environment Agency. Creating new duties on government and local authorities to publish this data is therefore unnecessary. Insurers can already access information, and to require government or local authorities to facilitate their use of the information would create unnecessary burdens on our public services. Within both the Environment Agency and the insurance industry, the modelling of UK flood risk continues to improve, resulting in models and maps than can assess flood risk at more detailed geographical levels, taking into account all the drivers of risk.

Amendment 238 would require the Financial Conduct Authority to make rules requiring insurance companies to participate in the currently voluntary build back better scheme, which was launched by Flood Re in April 2022. Amendment 239 extends the flood reinsurance scheme to premises built since 2009 that have property flood resilience measures that meet minimum standards and buildings insurance for small and medium-sized enterprise premises.

The build back better scheme is still in its early days and has not yet been fully embedded or tested. This is therefore not the right time to consider making changes. Properties built since 2009 should be insurable at affordable prices because of the changes to planning policy in 2006. If Flood Re were applied to homes built after 2009, that would be inconsistent with current planning policy.

[Baroness McIntosh of Pickering (Con)]

I am slightly concerned because the legal position is very clear: any new development built after 2009 on a flood plain, whether functional or not, simply does not qualify for insurance. That is the purpose of the amendment. Unfortunately, if a house purchaser does not require a mortgage, they will not realise that they are not covered by insurance until such time as they are flooded, hence the need for the amendment.

[Earl Howe (Con)]

I am in some difficulty because the advice that I have received is different. I shall need to take advice and write to my noble friend on that point. I come back to what I said earlier: properties built since 2009 should be insurable at affordable prices because of the changes made to planning policy back in 2006. That is the position as we understand it.

With regard to small and medium-sized enterprise premises, Flood Re was designed to provide available and affordable insurance for households, but that does not include businesses. There is no evidence of a systematic problem for businesses at high flood risk accessing insurance.

Amendments 240 and 241 would require, first, the Government to establish a certification scheme for improvements to domestic and commercial properties in England made for flood prevention or flood mitigation purposes and, secondly, the Financial Conduct Authority to make rules requiring insurance companies to consider flood prevention or mitigation improvements that are either certified or planning permission requirements in setting insurance premiums.

We are committed to promoting the uptake of property flood resilience and are working closely with Flood Re, the property flood resilience round table and the insurance industry to determine how best to develop the mechanisms needed for insurers to take account of property flood resilience when setting premiums. Additionally, the industry is exploring how to improve standards and skills. For example, as part of the joint Defra and industry round table, the Chartered Institution of Water and Environmental Management is developing a certified competent PFR practitioner scheme to help grow the pool of trained professionals and improve the standards for the design, installation and maintenance of PFR projects.

Amendment 245 in the name of my noble friend Lady McIntosh seeks to make water undertakers—that is, water and sewage companies—statutory consultees on planning applications for major development that is likely to affect water supply. I am grateful to my noble friend for this amendment. Like her, I appreciate the important role of water undertakers in maintaining public health and ensuring access to clean water for communities. This is why in the other place the Government committed to consult after Royal Assent on whether we should make water companies statutory consultees, how that would work in practice and any implications flowing from that. As the DLUHC Secretary of State can make changes to the list of statutory consultees through secondary legislation, we do not need to use the Bill to do that. With that in mind, I hope my noble friend will not feel the need to move her amendment when we reach it.

[Baroness McIntosh of Pickering (Con)]

My Lords, I am grateful to all noble Lords who have spoken, particularly the noble Lord, Lord Wigley, for supporting Amendment 231 and the noble Baronesses, Lady Pinnock and Lady Hayman of Ullock, for their support. I will not go through each and every amendment.

Amendment 245 is a direct consequence of the Pitt recommendation to end the automatic right to connect. We are placing the Government, the department, Ofwat and the Environment Agency, but in particular the water companies, in a difficult position by forcing them to connect when the pipes simply cannot take the sewage. It goes into the watercourses right at the beginning of the process, then into the rivers and to the coast, and we know that everyone gets upset about that.

To correct my noble friend, the ABI briefing for today’s debate says: “It is important to note that Flood Re does not provide cover for properties built after 1 January 2009. The 2009 exemption is an extension from previous amendments between the insurance industry and the UK Government, which jointly agreed to purposely exclude these properties from the scheme to ensure that inappropriate building in high flood risk areas was not incentivised”. That is why I shall be pressing Amendment 232 to a vote.

[Earl Howe (Con)]

If my noble friend would be kind enough to give way, I will repeat that my advice is that properties built since 2009, as she said, are not eligible for Flood Re. However, they should be insurable via the commercial market.

[Baroness McIntosh of Pickering (Con)]

Hand on heart, I do not know of any commercial insurance company—I know others are better versed on that, including the noble Lord, Lord Hunt—that would offer that.

I will respond briefly to the comments of the noble Earl, Lord Devon, which raise wider issues. I believe we are fixated on new build, which is forcing people to build on flood plains. One measure would be to remove VAT on the renovation of houses and put VAT on new build. But I believe it is the responsibility of local authorities to rule out building on flood plains where the direct consequence of that will force floodwater and displaced water into existing developments. I do not think the National Planning Policy Framework adequately addresses that. I will not go on any further, except to beg leave to withdraw Amendment 231.