Housing and Planning Bill

Lord Foster of Bath Excerpts

Wednesday 23rd March 2016 Lords Chamber

[Lord Foster of Bath (LD)]

My Lords, so often during our deliberations on the Bill we have been hampered by a lack of information. We have not seen the draft regulations—we have discussed that many times. We have not even seen the result of the consultation that is currently taking place. Of course, we should remember that that consultation is not due to finish until 15 April and the responses are going to be analysed over the summer, so we will have finished all our deliberations on the Bill long before those responses have even been analysed.

Furthermore, we have not seen the Government’s response to the excellent report by the DPRRC. I remind noble Lords that last night the Minister, the noble Baroness, Lady Williams of Trafford, said:

“I also confirm to noble Lords that I will be responding to the DPRRC report tomorrow, as well as giving my intentions for Report”.—[Official Report, 22/3/16; col. 2276.]

I have been checking on an hourly basis, with all relevant bodies, including the Committee Office, whether they have received that response. I say to the Minister that I am certain that even though that has not yet been made public she will have a copy of it, and I hope that when she replies to this debate she will furnish the House with details of the Government’s intentions in relation to this part of the Bill and their responses to the committee’s recommendations and concerns, of which there are a large number.

Those concerns are in addition to those raised by my noble friend Lord Greaves and the noble Lord, Lord Beecham—concerns that I share. They add to what the committee says. It talks about the Bill being drafted very widely, in terms of the powers conferred on the Secretary of State, and goes on, in paragraph 38, to say:

“These are important provisions which, in effect, empower the Secretary of State to require local authorities chosen by him to privatise the processing of planning applications for a trial period. The impact on local authorities and their staff, and on those submitting planning applications, could be considerable”.

Yet we have no details to enable us to work out in detail what that impact would be.

The committee goes on to say:

“It is striking that the clauses contain no requirement on the Secretary of State either to consult before making pilot regulations, or to publish a report on the outcome of pilot schemes”.

This is a point raised, quite rightly, by the noble Lord, Lord Beecham, and is covered by an amendment from my noble friend, which comes later.

Most damningly of all, the committee then goes on to describe the powers given to the Secretary of State as “almost unfettered discretion”, on an issue about which we have no details with which we can work out what should be done. Not surprisingly, therefore, the committee goes through a long series of recommendations —changes to the legislation that it would like. There is a requirement to set out the intended purpose of the pilot regulations on the face of the Bill; to specify that the affirmative procedure should apply to every exercise of the powers conferred by the clauses; to require the Secretary of State to consult local authorities and other interested parties before making regulations; and to provide on the face of the Bill for the maximum duration of pilot regulations. The committee’s report goes on to say:

“We also consider it inappropriate for the Bill to confer these highly significant powers on the Secretary of State without also requiring him to prepare and lay before Parliament a report on the outcome and effectiveness of each pilot scheme”.

My point, in going into some detail about that, is that we know that the Minister will have with her now a response to each of those points. It is incumbent on her to share those responses with the House before we finish our deliberations on these clauses in Committee. However, we also need from the Minister some clarity on other issues—for example, the pilots themselves—because we have at last been furnished with a timetable for the various bits of secondary legislation that will come before us. I am grateful to the ministerial team and their staff for providing us with that, but it is not a great deal of help when every single page that we have been given has a heading that helpfully says:

“Timings are indicative and may change as policy develops”.

I remind the House what it says in the limited information with which we have been provided in relation to the section headed “Processing of planning applications by alternative providers”:

“How many SIs are currently planned? One. What procedure? Negative”,

which I hope will change to affirmative. It then asks:

“What will they deal with?”,

and says that:

“The regulations will cover … the scope of the pilots”.

Later on, it talks about “pilot areas” and so it goes on, with reference to pilots in the plural. Indeed, we know that in the memo to the DPRRC the memorandum said:

“It is likely that different procedures may be trialled in different pilots, to see what works best”.

It is quite clear that the intention is to have a number of pilots, yet when I look at the question:

“What are the key timings?”,

it tells me that is not going to be a long time. It says that the consultation,

“closes on 15 April and the responses will be analysed over the summer, and the pilot scheme designed as a result”.

Here the word is singular: there will be one type of pilot rather than multiple pilots, so confusion begins to set in as well.

There are then confusions in relation to other aspects of the legislation. We had a discussion at a late hour last night, instituted by the noble Baroness, Lady Gardner of Parkes, with her excellent amendment at midnight on the issue of planning fees. What we learned during that deliberation was that the vast majority of councils lose a great deal of money from the planning process. The average recovery is about 50%. We know that London boroughs, for instance, are losing somewhere in the region of £40 million each year on the operation of their planning departments. We also discovered that the increase which the Government are considering is to be no more than inflation since 2012 and that some councils deemed to be underperforming will get less than that. From the current plans, we therefore know that local authority planning bodies will continue to lose a great deal of money from this process.

The question then has to be asked: if in some places we are going to privatise the process and bring other bodies in, how are those bodies going to come in knowing that if they have the government-prescribed fee scheme they will lose a great deal of money? It is simply not going to happen, so what is in the Government’s mind in relation to the setting of fees? I have done a detailed analysis of all the documents to try to help me work out what the fees should be. I looked, for example, at the technical consultation document with this very intriguing headline, which suggests that we will get a good detailed answer:

“Question 8.2: How should fee setting in competition test areas operate?”.

But it reads:

“In competition test areas, applicants would select who they want to process their planning application and pass it direct to the provider with the appropriate fee”.

That is all it says about the fee structure within the technical consultation document. The Explanatory Notes are equally helpful, telling us that:

“Clause 147 provides that regulations may set out how fees will be set, published and charged”.

But since we do not have any of the details because we do not even have draft regulations, we are in a great deal of difficulty.

The Government are going to find themselves in real difficulty if they allow full cost recovery and a profit for some people who come in, compared to local councils, which will charge only 50% of that price. That is hardly a good way of testing the so-called competitive market. It fails to take account of the many difficulties that different local authorities will face. We will have an opportunity to discuss this in a bit more detail in deliberations on some of the other elements of this legislation.

I want to end with one other area of confusion. It is pretty clear from all the documentation I read that the Secretary of State is going to decide which local authorities’ planning departments will have competition forced on them. I have looked very closely at the Government’s consultation document and I wish to read to the Minister what it says in chapter 8, paragraph 8.1:

“Nor is this about preventing local authorities from processing planning applications or”—

and these are the words from the Government’s own document—

“forcing them to outsource their processing function”.

Can the Minister tell us whether this is about forcing some councils to do this, or not? You cannot have a situation where the Government go out to consult on something and tell the people whom they are consulting one thing, when the reality of what they are planning is totally different.

--- Later in debate ---

[Baroness Evans of Bowes Park]

I will take that back and write to the noble Lord. I will respond on one other general point before moving on to the amendments. My noble friend Lord True asked about the moral hazard involved in selecting who processes planning applications. We are not selecting who processes a particular application: it is the applicant who chooses. There will be an approved list of providers that the applicant can go to, but they will choose their provider.

We welcome the scrutiny that the Delegated Powers and Regulatory Reform Committee has brought to these clauses, which was mentioned by the noble Lord, Lord Foster. A response will be published by the end of today, but as noble Lords know, we are not quite sure when that will be.

[Lord Foster of Bath]

I am sorry but the Minister specifically said yesterday that it would be before the House rises. That is for the Minister to sort out, but can she give us an assurance on this? The assurance that her colleague gave us was that, before we leave this Chamber, we would have a copy of it in our hands so that, should we wish to, we can refer to it in any subsequent amendment.

[Baroness Evans of Bowes Park]

I will come back to that in a second but, as I say, we will be publishing the response by the end of today. We therefore believe that Amendment 102CLA, tabled by the noble Lord, Lord Greaves, is premature.

I thank the noble Lord for Amendments 102CL and 102DB about consent. An effective test of competition is likely to be achieved with a set of pilots which reflect the different types, sizes and geographic locations of local authorities. To answer the question of the noble Lord, Lord Foster, there will be a number of pilots, not just one. Local authorities have consistently told us that a fair test of competition must include weaker authorities at the lower end of the performance spectrum—pilots cannot just include top-performing, progressive authorities. However, they are concerned that weaker authorities are unlikely to volunteer to be in pilot areas. Therefore, we need powers which give us the necessary flexibility to select an appropriate mix of pilot areas and to be able to respond to the sector’s concern if necessary.

I do not see how compelling a local authority to be a designated provider would work in practice. How would we actually force a local authority, against its will, to compete for work in another patch and to do that work to a high standard? We do not therefore intend to compel any local planning authority to be a designated provider.

I turn now to Amendment 102D. We have been very clear that during any competition pilots we bring forward under Clause 145, the responsibility to determine planning applications will remain with the local planning authority in the pilot area. I will put this as clearly as I can: only the local authority can decide on an application. Clause 145 will give the Secretary of State the power, by regulations, to introduce pilot schemes for competition in the processing of applications for planning permission. Subsection (1) allows the regulations to make provision for a planning application to be “processed” by a “designated person”, and subsection (6) says that “processing” the application means any action “other than determining it”.

Amendments 102CM, 102DA, 102FA and 102FB, tabled by the noble Lord, Lord Greaves, would remove intended safeguards. For example, Clause 145(3), which would be removed by Amendment 102CM, leaves room for the Government to exclude from the pilots certain types of application where local government and others can make a compelling case that they are so significant or sensitive that they should continue to be handled by the relevant local planning authority. Clause 146(1)(a), which would be removed by Amendment 102FA, enables us to specify circumstances where it is inappropriate for a designated person to process an application, for instance because of a conflict of interest. The removal of text that would result from Amendment 102FB would leave us unable to specify the circumstances in which a planning authority should take over an application from a designated person. They could either potentially take them all over without limit, or none, and we believe removing the safeguard is impractical and unworkable.

Amendment 102DAA was tabled by the noble Lords, Lord Kennedy and Lord Beecham. Enabling the private sector to compete with local planning authorities is likely to drive greater reform than if we leave things solely to authorities, as the noble Lords would wish. We are proposing pilots to test the benefits of introducing competition in planning application processing.

[Baroness Evans of Bowes Park]

My apologies. However, my argument stands. We want to encourage the private sector to be involved as well, but I apologise for that misreading of the noble Lord’s amendment.

Amendment 102EA would extend the definition of “planning application” to include permission in principle and technical details consent. I thank the noble Lord, Lord Greaves, for his amendment. We intend to give it some further thought.

We intend to design the pilot schemes collaboratively with local government, professional bodies and the private sector. We are already consulting on how they might operate. Furthermore, an extensive dialogue with key partners is under way and in the last six weeks we have met with more than 80 local authorities through a range of events. The noble Lord, Lord Greaves, raised a number of technical points. Obviously, these are issues that will be addressed through the pilot schemes.

The noble Lord, Lord Foster, asked about the draft regulations. As I hope I made clear, we are engaging extensively with the sector and consultations are currently out for consideration. As I said, we have already spoken to more than 80 local authorities. I would be happy to write to him to provide an initial summary of the issues raised so far during our engagement with the sector.

[Lord Foster of Bath]

I apologise, but will the Minister answer my other question about the technical consultation? It may have been a drafting error by the Government, but paragraph 8.1 specifically says:

“Nor is this about preventing local authorities from processing planning applications or forcing them to outsource their processing function”.

If that is correct, the first amendment in the group, which would mean that local authorities would have choice in the matter, is presumably accepted by the Government. Alternatively, this is an error and the Government have gone out to consult on a document that contains a fundamental error about the purpose of this section of the Bill.

[Baroness Evans of Bowes Park]

I said earlier that we do not intend to force local authorities to outsource their functions. I will have to read further what the noble Lord said and respond in writing.

[Lord Foster of Bath]

My Lords—

[Baroness Evans of Bowes Park]

I have given the noble Lord the answer that I can. I am sorry that he is unhappy with it. I will go back and have a look to see whether I can provide him with any other information.

The noble Lord will also not be happy with my response to his question on the DPRRC report. I am afraid that it depends on what time the House rises as to whether noble Lords get it before we rise, but they will get it today. On that basis, I ask noble Lords not to press their amendments.