Levelling-up and Regeneration Bill (Nineteeth sitting)

Greg Smith Excerpts

Committee stage
Tuesday 6th September 2022 Public Bill Committees

[Rachael Maskell]

I have been reassured by the Minister that this will form part of the wider consultation process in the next stage. We will look at that with interest. Clearly, we will want to follow this through in later stages, but I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Greg Smith (Buckingham) (Con)]

I beg to move amendment 58, in schedule 11, page 287, line 33, at end insert—

“(1A) A charging schedule may—

(a) require a developer to pay their full IL liability for a development before being permitted to commence work on that development,

(b) require infrastructure funded by IL associated with a development to be built before work on that development may commence.”

This amendment would enable Infrastructure Levy charging authorities to require a developer to pay their full IL liability, or for infrastructure funded by IL associated with a development to be built, before development may commence.

[The Chair]

With this it will be convenient to discuss amendment 161, in schedule 11, page 299, line 35, at end insert—

“(2A) IL regulations must specify that payment of IL must take place within a reasonable period of implementation of a development or phase of development or in accordance with any instalment policy adopted by the charging authority.”

This amendment would seek to ensure that infrastructure levy payments were made following implementation of development (or following the implementation of phases or instalments where permitted by the charging authority).

[Greg Smith]

I will not detain the Committee for long. The amendment very much speaks for itself. It enables a charging schedule to require that, where an infrastructure levy is required, it be paid up front, or, where the infrastructure levy requires the developer to build something out themselves, that the infrastructure they are building—the GP surgery, school, road, or whatever it might be—be built first. It is a straightforward amendment. Having heard so many colleagues speak in the House or around the place, the great frustration that I have seen in my constituency, and that I have heard from others, is that, when in particular big housing developments or huge industrial parks are built, the infrastructure comes far too late.

I congratulate the Government, and welcome their presumption that infrastructure should come first. Through the amendment, which for clarity I will not press to a Division today, I urge them, as the Bill progresses to Report stage, to really think about locking their own desire and stated policy for infrastructure to be built first into the Bill. I warned that I will not press the amendment to a Division because, having lived through the glorious summer recess leadership election, we have heard a lot of talk and commitments about planning policy and the things that are in the Bill and which the Committee is talking about. I suspect that on Report it will be a wholly different Bill from the one that we have been debating over the past few months in Committee. The point that I wish to push is that the amendment marries up with what the Government have stated that they want to do, and I appeal to Ministers to find a way of incorporating the spirit of the amendment into the Bill on Report.

[Matthew Pennycook]

When speaking to the first group of amendments to this part of the Bill, I outlined in great detail why the decision to make GDV the metric for the new levy is likely to result in applicants making their IL payments at the end, rather than the beginning of the development process. As I argued when making the case for charging authorities to have a choice when it comes to adopting the new levy or retaining the present system, if a levy with GDV as its metric is made mandatory, the final IL liability will almost certainly not be known and become due until near the point where a development is completed. Given the problems inherent in attempting to design a levy system that enables interim payments or payments on account, that convinces sufficient local authorities to borrow against future levy receipts with all the risk that entails, or that overcomes the problems that will arise from paying for infrastructure on one site with levy contributions extracted from others, the most likely outcome is a situation where the infrastructure required to support development will not be in place when it is needed, as the hon. Member for Buckingham has just outlined. That is deeply problematic because, as I said earlier, we think it will mean fewer overall approvals, more unsustainable development when it does occur and greater local opposition.

Amendment 161 seeks to address that issue by specifying in proposed new section 204R on levy collection that the payment of IL must take place within a reasonable period of a development or phase of development commencing or in accordance with any instalment policy adopted by the charging authority. In doing so, it simply aims to avoid additional delays to the provision of infrastructure that will be necessary to support development and the resulting pressure that that would place on existing local infrastructure.

Amendment 58 in the name of the right hon. Member for Chipping Barnet (Theresa Villiers) and others similarly seeks to revise the Bill so that IL payments are made earlier than is currently proposed by the Government. We support the principle, for the reasons I have outlined. However, in enabling charging authorities to require developers to pay either their full IL liability or sufficient amounts of it to enable a development to be built before development commences, that amendment goes much further than currently provided for by either CIL or section 106 agreements, which are typically paid prior to implementation of a development or phases. Because it is not mandatory for planning permissions to be implemented, we are slightly concerned that amendment 58 could lead to a situation where IL contributions are paid and infrastructure provided on development that is not subsequently completed. Mandating the payment of IL before development commences would also impact on developer cash flow and viability, particularly in cases of phased developments, which could have the consequence of reducing IL rates and thus the overall level of affordable housing and infrastructure contributions provided.

Lastly, the problems inherent in a levy based on the metric of GDV—in terms of multiple valuations having to be undertaken at different stages in the development process, with the final liability not being known until years after the application was submitted—would be magnified were a provision to be introduced mandating the payment of IL before any development commences. For those reasons, and with all due respect to the hon. Member for Buckingham—I agree with him on the principle—we believe that amendment 161, which merely requires IL payments to be made within a reasonable period of a development or phase of development commencing, is the more proportionate response to a problem that is clearly recognised across the Committee. I hope the Minister will give serious consideration to accepting our amendment so we can ensure that, if the levy is introduced, it allows for the infrastructure required to support development to be in place when it is needed.

--- Later in debate ---

[Mr Jones]

As we have discussed a number of times during the debate, the matter to which the hon. Gentleman refers will be set out in regulations. Clearly, that needs to be considered, because we need to ensure that there is a mechanism whereby payments are required to be made earlier in the development. That mechanism will be there and we can make that happen.

In due course, as I have said, we will consult on how the levy might be collected and paid. For example, we intend to explore whether a substantial proportion of the levy should be paid prior to the completion of the development or a phase of it. That plays into what the hon. Member for Greenwich and Woolwich mentioned. It would give charging authorities confidence that they will secure funds before the development is sold on. I hope that my reassurances that the Bill already provides powers to achieve the objectives laid out in the amendments in this group will mean that at this point my hon. Friend the Member for Buckingham is able to withdraw his amendment and that the hon. Gentleman feels able not to move amendment 161.

[Greg Smith]

As I indicated earlier, I am happy to do so. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Ordered, That further consideration be now adjourned. —(Gareth Johnson.)