Localism Bill

Lord Jenkin of Roding Excerpts

Wednesday 20th July 2011 Lords Chamber

[Baroness Hamwee]

My Lords, my noble friend Lord Greaves, who tabled this amendment, is unable to be here this afternoon—sadly for us, maybe not for him. Clause 124 deals with local finance considerations in connection with applications for planning permission. It provides that local finance considerations may be considered in dealing with those applications in so far as they are material to the applications. My noble friend’s amendment provides:

“For the avoidance of doubt”,

the relevant subsection,

“should not be read to imply that any greater weight should be placed on local finance considerations than on other material considerations”.

My noble friend Lord Greaves knows, because we discussed it yesterday, that this is not my preferred option, but I am very happy to move it in order for it to contribute to the debate.

We have heard that, in this reference to local finance considerations and their materiality, there is no change to the law and that this is merely a matter of clarification. Indeed, that is what the amendment says. Perhaps it is necessary to make it clear that the materiality of financial matters should be no weightier than other material considerations. However, it is important—indeed, essential—to be clear that planning permissions cannot be bought and sold and that they should not be thought of as being able to be bought and sold.

The issue is topical because of the new homes bonus announced by the Government. In their response to consultation on the bonus in February this year, they said:

“Local planning authorities will be well aware that when deciding whether or not to grant planning permission they cannot take into account immaterial considerations. The New Homes Bonus cannot change this, and nor is it intended to. Local planning authorities will continue to be bound by their obligations here”.

This bonus is not the first matter on which finance and planning have come together on a list of matters which a local planning authority has to consider. Noble Lords will be familiar with Section 106. The not bought or sold issue was stated unequivocally in Circular 05/05, which deals with Section 106:

“The use of planning obligations must be governed by the fundamental principle that planning permission may not be bought or sold. It is therefore not legitimate for unacceptable development to be permitted because of benefits or inducements offered by a developer which are not necessary to make the development acceptable in planning terms”.

That is fine so far and, I should have thought, fine as regards any new source of finance. However, Clause 124 raises a number of issues, of which I shall refer to just two. One is material considerations. That term has been defined in case law, not statute, since the birth of our town and country planning system in 1947. The second raises the issue of how government incentives are to influence planning decisions. The Royal Town Planning Institute commented on this. It stated:

“The RTPI recognises that the use of incentives to stimulate development is at the heart of the Government’s approach to growth. However, we firmly believe that the point at which incentives should affect policies and cultures is when local authorities and communities are preparing plans for their areas—not at the point of deciding on the individual applications that deliver that plan”.

As I said, that is the view of the RTPI and it is my view as well.

If there is no change in how material considerations are to be dealt with, not only, in my view, is it not necessary to provide for this in legislation but it is positively harmful. Clause 124 must mean something and I think that it can mean only the elevation of financial considerations above others. Can this not be dealt with by circular or guidance in the way that these matters are currently dealt with?

I have a question for the Minister, of which I have given him notice. Can he explain the case law or anything else that has led the Government to take the view that the position needs to be stated in primary legislation rather than simply confirmed in guidance? If it has to be referred to in primary legislation, why is there not just an obligation on the Secretary of State to issue guidance to the local planning authority so that it has regard to local financial considerations so far as they are material to the application, as well as regard to the provisions of the development plan so far as they are material and any other material considerations?

I hope that I have been clear about the danger that I believe exists in trying to address a problem that is not there. By doing so, you suggest that there is an issue which you are denying—have the Government stopped beating their wife yet? My strongly preferred solution is to remove the clause entirely, but I am very happy to move my noble friend’s amendment because it raises issues on which I hope the Government can reassure the Committee today. I beg to move.

[Lord Jenkin of Roding]

My Lords, my noble friend Lady Hamwee has put a very convincing case. Like others, when I received a flood of representations from a number of environmental and other bodies that the clause opened the door to buying planning permission, I thought to myself that that cannot be right. I looked into it and, of course, I found that the provision is really intended to be a restatement and clarification of existing provisions. I shall not repeat what my noble friend has said about the Town and Country Planning Act 1990 and her reference to any other material considerations.

In his absence, I say to my noble friend Lord Greaves, who has taken a great deal of time during the passage of the Bill to put his views to the House, that I think this is a brilliant amendment. It exactly meets what we want to say. We need a restatement of the law and it would not surprise me at all if my noble friend indicated that that was the legal advice which the Government have had. However, it is right to say that finance is no more material than any other consideration that a planning authority has to take into account. I would be perfectly happy with the clause if amended in this way.

My noble friend Lady Parminter’s opposition to Clause 124 standing part forms part of the first grouping on the list and I thought, “Gosh, this must be important”. I think this matter has been blown out of proportion. Nothing in this suggests that planning permission can be bought and sold. Other provisions, which we discussed earlier, such as the community infrastructure levy, the whole question of Section 108 and various other measures, are all important planning considerations. As I understand it, this clause with the amendment is exactly what the House should want. I very much support it.

[Baroness Parminter]

My Lords, I oppose that Clause 124 stand part of the Bill. My noble friend Lord Jenkin was kind enough to reflect on the fact that I gave notice of this matter only because I think it is important, and it remains an important issue. This clause outlines the fact that financial considerations can be material to a planning application and it was added on Report in the Commons. The Minister then said that,

“it is an incidental measure for clarification”.—[Official Report, Commons, 17/5/11; col. 271.]

Frankly, why is such clarification needed in statute?

As my noble friend Lady Hamwee has stated, the test for establishing what considerations are material in planning have developed from case law, not statute, since 1947. The classic statement is found in the 1970 case of Stringer v Minister for Housing and Local Government, which makes it clear that any consideration which relates to the development of land is capable of being a planning consideration. Accordingly, there is no legal or policy restriction in place that forbids financial considerations from being taken into account in relation to judicial decisions on planning applications. Indeed, over time, the courts have asserted that a range of particular financial considerations can be taken into account.

However, as this clause stands, it threatens the probity of planning. It sends a message out to developers that under this new planning system, which relies heavily on incentives—not top-down targets—to secure development, such planning permissions can be bought and sold. This concern has a long history. In 1997, the Nolan committee’s report on the standards of conduct in local government made it clear that the Government should consider whether the present legislation on planning obligations is sufficiently tightly worded to prevent planning permissions from being bought and sold. A key principle of planning has been that applications are decided on their planning merits, which can already include financial considerations, as my noble friend Lady Hamwee has said. Many of us who are or have been councillors will be only too familiar with Section 106 and other planning obligations where funding is used to make an otherwise unacceptable planning application acceptable in planning terms.

However, this clause elevates financial considerations above all other legitimate planning considerations, which are not mentioned here or anywhere else in statute, and it can be read as meaning that financial inducements that are irrelevant to the merits of a particular development proposal can be material in determining planning applications. As such, it is a fundamental and deeply damaging change to the planning system.

If further clarification is needed on the relationship between financial considerations and considering planning applications, then the way to achieve this is by drawing up guidance for local authorities, not through primary legislation. The probity of the planning system is crucial, and is indeed vital if we are to achieve community buy-in to sustainable development, and meet the housing needs that we know are out there in our communities.

This clause threatens to bring the planning system into disrepute, and should be withdrawn.

--- Later in debate ---

[Lord Berkeley]

My Lords, with the leave of the House, I would like to speak to Amendments 168 and 169.

[Lord Jenkin of Roding]

My Lords, the noble Lord is perfectly entitled to speak to an amendment that has not been moved because, as the clerks will tell one, an amendment belongs to the House. I have to say, though, that it is totally contrary to the spirit and conventions of this House that someone should seek to speak to an amendment that has not been moved. We cannot stop the noble Lord, but I hope that he will do so extremely briefly. I have a number of other amendments in exactly the same situation, and I do not intend to say anything about them at all.

[The Deputy Chairman of Committees (Lord Colwyn)]

If the noble Lord speaks to the amendment, he must move it.