Town and Country Planning (Fees for Applications, Deemed Applications, Requests and Site Visits) (England) (Amendment) Regulations 2014

Lord Bichard Excerpts

Monday 10th February 2014 Grand Committee

[The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Stowell of Beeston) (Con)]

My Lords, the regulations amend the Town and Country Planning (Fees for Applications, Deemed Applications, Requests and Site Visits) (England) Regulations 2012. The draft regulations have been approved in the other place and, if approved by this House after consideration by the Grand Committee, would come into effect at the end of February. The regulations clarify how local planning authorities should calculate the level of fees payable for proposals for oil and gas extraction.

The coalition Government believe that shale gas has the potential to provide the UK with greater energy security, growth and jobs. We are creating a framework that will accelerate shale gas in a responsible, safe and sustainable way. We have a robust regulatory regime in place, which is grounded in an effective, locally led planning system. That is why local authorities—county councils and unitary authorities in this case—have the responsibility for determining planning applications. They take decisions in accordance with local plans and the National Planning Policy Framework. I want to be clear that this amendment is intended to clarify only one particular point of law.

Departmental guidance going back to 1992 makes clear the Government’s long-standing intention that, for oil and gas applications, fees should be calculated on the basis of the area of the surface works. This is also a practice that has been employed by authorities for many years. Planning authorities have regarded the application boundary of a site by reference to the surface area and charged a fee accordingly. However, the fee regulations themselves refer to the,

“land to which the application relates”—

in other words, the extent of development, including underground works.

Until relatively recently, the tension between the regulations and the guidance has not been an issue in practice. Traditionally, onshore oil and gas development has involved vertical drilling. It is only with the advent of horizontal drilling, including the prospect of hydraulic fracturing of shale, that we have become aware of questions on this issue from the sector and local authorities in recent months. As paragraph 7.3 of the Explanatory Memorandum points out, there are instances in which this alternative interpretation has been adopted. The simple purpose of the regulations is to clarify the law beyond doubt. Therefore, Regulation 2 provides that a fee is not payable for any part of an oil and gas development that takes place underground if there is no oil and gas development on the surface directly above the operations.

We also recognise the confusion and uncertainty over how to interpret the term,

“land to which the application relates”,

when providing information on oil and gas applications, especially on how to show this on a map. Our national planning policy guidance, which will be published in due course, will address this. Applicants will be expected to indicate the horizontal extent of drilling, although this will not affect what they are charged. It is important to understand the likely extent of the proposed development. For example, planning authorities need to know to publicise the applications in relation to the larger area. It is also essential that the planning permission indicates where the underground development is allowed to take place. This is necessary to ensure effective monitoring and enforcement of planning conditions.

We are also taking this opportunity to increase the fees for applications for oil and gas development. As part of our consultation last year, the UK onshore oil and gas industry, which represents the majority of onshore operators, offered to increase the level of fees by 10%. It did so because it recognised that applications for oil and gas extraction, especially shale gas, may be subject to increased public scrutiny. Therefore Regulation 3 provides for application fees to rise by an above-average increase of 10% for all oil and gas applications. Let me be clear, however, that this is not a 10% increase across all categories of development. It affects only applications for oil and gas.

I should now like to address the concerns expressed by the Secondary Legislation Scrutiny Committee. It expressed concern at the lack of time for effective scrutiny of these regulations, as well as the others that were introduced last month. There has been an exchange of correspondence between my department and the committee, and that has been published by the committee. As noble Lords will see from that document, it relates to both today’s regulations and another set of regulations, which are not before us today.

We fully recognise the importance of providing Parliament with sufficient time to scrutinise statutory instruments. We were working to issue the supporting material—the impact assessment and the summary of consultation responses—alongside the statutory instrument before Christmas. However, there was a longer delay than we anticipated in doing so. I am sorry that the scrutiny committee was inconvenienced in this way. It was never our intention to impact on Parliament's consideration of these instruments. However, I am grateful that it was still able to consider the statutory instruments last month.

The scrutiny committee also expressed concern that the department had not systematically evaluated the financial impact on the public sector of the new arrangements. This is even though we acknowledge that applications might be subject to increased public scrutiny, and so the costs to planning authorities of handling them might increase.

The level of fees is not set by examining the cost of processing each type of development in isolation. The fee is based on the average cost of determination across all local authorities in England. These regulations will affect an average of 32 applications per year. That is 32 out of more than 450,000 received by planning authorities in England each year. It is wholly disproportionate to carry out a detailed financial analysis in such circumstances.

We set out our assessment of the changes to these regulations in the impact assessment for the other statutory instrument. Fees are outside the scope of the Government's “one in, two out” procedure for better regulation. However, that does not mean that we do not take seriously the impact on planning authorities that have to handle such applications. We have concluded that there will be a small positive impact. This is based on the Government's intention for how fees should be calculated, as well as the past practice employed by many planning authorities. We must also not forget that planning fees for oil and gas development are already higher than the average fee.

The scrutiny committee also asked why the Government are keen to progress with these changes when there is such a degree of opposition, and after what it perceived as a relatively short period of consultation. I can assure noble Lords that we carefully considered the nature and impact of these proposals when considering the length of time for consultation on the draft regulations. Our consultation period was in line with the revised Cabinet Office consultation principles, which we support and follow. We also carefully considered the responses before pressing ahead with our proposals. Of course, these proposals do not just cover shale, they also cover other oil and gas extraction.

While some local planning authorities might not welcome this proposal, since it could deprive them of an opportunity to raise more income through the planning system, the point is that the statutory planning functions are not just financed through the fees which are set; they are also subsidised by government grant and local raised revenue.

It is important for me to stress that these regulations simply clarify the Government’s long-standing intentions by seeking to clarify the level of fees for onshore oil and gas operators. They will provide clarity for investors, local authorities and local communities alike, and the modest fee increase we have set will help planning authorities to meet the costs of these applications. We have responded to the committee, and our response and the committee’s letter to my right honourable friend the Secretary of State have been published and are available. I commend these regulations to the Grand Committee. I beg to move.

[Lord Bichard (CB)]

My Lords, I welcome the opportunity to make a contribution to this debate as a member of the Secondary Legislation Scrutiny Committee. As noble Lords have already heard, the committee has had considerable reservations about the way in which these regulations have been processed. During my public service career I have generally taken the view that when things go wrong it is the result of incompetence rather than malign conspiracy, but I have to say that the way in which this has been handled may cause me to revisit my position.

Let us revisit the facts from a slightly different perspective from the one we have already heard. The original consultation took place in September and October and allowed just six weeks for responses. The Government’s own new consultation principles, which were published in July 2012 and have not been without controversy, provide:

“For a new and contentious policy”—

such as a new policy on nuclear energy—

“12 weeks or more may still be appropriate”.

As the chairman of the Secondary Legislation Scrutiny Committee pointed out, streamlining procedures in relation to fracking might very well be seen as a new and contentious policy. Given that the Government allowed only six weeks for this consultation, it is hard to imagine what policy considerations might lead them to allow 12 weeks or longer for other consultations.

Let us carry on with the story. The regulations were laid on 20 December last year; that is, during the parliamentary Recess and a day or two before most of us were involved in other festivities. They were brought into force on 13 January this year, just one week after the end of the Recess. As the chairman of the committee, the noble Lord, Lord Goodlad, pointed out in a letter to the Minister, Mr Nick Boles, clearly this gave,

“scant opportunity for Parliament to scrutinise the instrument before it took effect”,

which, given that this is a controversial issue, was especially “regrettable”. The fact that it applies to only a small number of planning applications each year does not change the fact that this is a controversial issue.

To make things worse, as the Minister herself has said, the department failed to publish a detailed analysis of the consultation responses or any impact assessment when the instruments were ultimately laid. Therefore, such scrutiny as Parliament was able to provide was not informed by this important material. The committee pressed for this but it was not provided until 24 January, a full month after the instruments were laid. It showed that only seven of the responses were in favour of the Government’s proposed changes and 155 were against. I am not making points about the content of the regulations—others may want to—but it is right that Parliament should know the outcome of the consultation when the instruments were laid.

When these concerns were put to the Minister, Mr Boles, by the chairman of the committee, the response was close to dismissive. The department does, it seems, support and adhere to the revised Cabinet Office guidelines but, on the advice of its own deregulation unit, felt that the six weeks allowed in this case was proportionate. As for laying the instruments just before Christmas and without the necessary supporting material, we were to be reassured that there was no intent to impact on Parliament’s consideration of them.

I think that the way in which this has been managed is regrettable. It has shown scant respect for Parliament and scant respect for effective consultation, which is an important cornerstone of our democratic system. I hope that the Minister, in addition to the assurances that she has already given us, will be able to offer some greater reassurance than did Mr Boles that this sort of thing will not be allowed to happen again. There may not be many people here to hear this debate today, but these issues go to the heart of our constitutional process.