Levelling-up and Regeneration Bill

Committee (11th Day)

Clause 104: Completion notices

Debate on Amendment 261 resumed.

I think it falls to me to intervene at this point. I will speak to Amendment 269, which concerns the development of larger housing sites. I reiterate declarations of interest: I am vice-president of the Town and Country Planning Association and of the Local Government Association. I thank the CPRE, whose excellent legal advisers devised this amendment. I am delighted to see the good work being done by the CPRE in partnership with Shelter, the TCPA and others, to improve decisions on what and where new development takes place.

Amendment 269 seems a fairly innocuous and technical one, but actually it fundamentally changes the dynamics of new development on larger sites. It seeks to bring into play some of the recommendations from the 2018 review of housebuilding practices by Sir Oliver Letwin, who was working on behalf of the Government. The amendment addresses issues of diversification of housing and infrastructure on larger sites, as advocated by Sir Oliver. Diversification of providers and provision would replace the housebuilders’ model of one developer cramming in the maximum number of homes of the same house type for the same house buyers and selling them at the very slow but profitable buildout speed that the market will absorb. Instead, larger sites, said Sir Oliver, should be subject to a diversity of housing provision, where a number of different developers, including SME builders, housing associations, self-builders and so on, would build a variety of different sorts of housing for families for rent and for sale, perhaps student housing and certainly accommodation for older people, to which we have made reference under other amendments, with green spaces and infrastructure, as well as transport links for walking and cycling and public transport, not just private cars.

Those other providers would work together at the same time, building out the total development at a much faster rate than with single ownership by one volume housebuilder. That approach would diminish the dominance of the oligopoly of volume housebuilders, which have failed to deliver what society needs. Instead, the variety of developers and housing providers would work simultaneously in meeting the needs of the locality. The detail of the diversity of types and tenures of the new housing, including social housing, would be enshrined in the local plan—now the local development plan.

Sir Oliver saw much merit in local development corporations, at arm’s length but wholly owned by the local authority or combined authority. They could acquire sites and parcel them out within a master plan. In cases where the development corporation is unable to reach agreement with the landowner on the site’s value, compulsory purchase may be the only way forward. If so, the terms for the CPO would be set by the same requirements to meet the obligations laid out in the local development plan and national policies. The value of the site is thereby moderated by the necessity of complying with local and national mandates.

My Lords, I thank the noble Baroness, Lady Taylor of Stevenage, and the noble Lord, Lord Best, for raising these important points about buildout.

I will address the noble Baroness’s amendment first. Too many developers choose to land bank having achieved planning permission on a particular site. We know from Local Government Association data that there are more than 1 million housing units with existing planning consent that have not been built. The question we need to ask is: why, when as a country we are desperate for new houses, are we failing to take action to ensure that sites are developed promptly? Is the Minister able to provide any explanation for the long delays in developing sites? Will the Government provide proposals to prevent such delays?

I think we are all keen to have more housing units built, so we should focus on any delays in the system and try to improve buildout. From local experience I am aware of some of the reasons for delay. Where there are several sites with planning consent in the same locality, developers choose to delay construction in order not to have too many units on the market at the same time. That is an understandable commercial decision, but it delays the building of units of housing, which we desperately need. Developers also, understandably, want to create a steady flow of sites to develop as part of their business plans. These extend into several years, so it is not surprising that there is a slow output of new homes. What actions do the Government intend to take to address this issue?

The key issue in these amendments is the rate of buildout. One site in my locality has consent for 300 houses and plans to build out over an eight-year timescale. It wants only 30 to 40 new units on the market at any one time, to maximise its profit. That is a commercial decision, which I can understand, but it does not help the country in building a number of new homes very quickly, which is what is needed. It would be interesting to hear from the Minister how the Government can address that issue.

Amendment 269 in the name of the noble Lord, Lord Best, raises the important issues, which we have discussed to some extent in previous debates, of how we get more social housing on a site, how we get more housing appropriate for older people and how we get sites developed that reflect the needs of a particular locality. I agree totally with the objective of his amendment, but currently we have a landowner-led, developer-led process for building homes. At the outset of a local plan, the first step is the request to landowners to bring forward sites. Landowners do this because, once they get planning consent, the value of their land rises considerably.

The whole housing development process is in the hands of the providers, which provide what people may want and not what communities need. All our debates on planning so far have been about how we address need. The way the planning process is currently constructed enables developers to build what is wanted and not what is needed. There are very few levers, as I have tried to explain, to push developers to build what local areas need. Can the Minister explain how local and national plan policies can be enforced or at least implemented, which they cannot be to any great extent now? A negotiation goes on between the local planning authority and a developer; each pushes and negotiates, but in the end the commercial interest has the upper hand, in my experience.

For me, those are the issues at the heart of this. We have an urgent need for new housing in this country. The Government are not using the levers that the country needs to enable housebuilding to occur and to provide for the needs of our communities, rather than the needs of commercial construction and development companies.

My Lords, Amendment 261 tabled by the noble Baroness, Lady Taylor of Stevenage, proposes two fundamental changes to Clause 104, which modernises the procedure for serving completion notices in England. While I appreciate the intention, I remind your Lordships that completion notices—when served by a local authority or the Secretary of State—must provide the recipient with an opportunity to complete development. It is a “use it or lose it” power. Removing this opportunity for the developer to use the permission, as this amendment does, raises the prospect that compensation from the loss of the permission will be necessary as it is a revocation of a planning permission. I believe this would make completion notices less appealing to local planning authorities.

The second proposed effect of the amendment relates to the removal of finished parts of a development where a site could not be completed in full. Local planning authorities already have the power to require the removal of unfinished developments by order under Section 102 of the Town and Country Planning Act 1990.

The noble Baroness, Lady Pinnock, brought up one or two important issues. In the clauses already in the LURB, we have introduced two further provisions to ensure a better buildout rate of planning permissions in this country. First, the Government will require housing developers to report annually to local authorities on their actual delivery of housing. This will enable them to identify where sites in their area are coming forward too slowly. It will also help to inform whether to sanction a developer for failure to build out their schemes promptly. Secondly, the Government have introduced a new power that will allow local planning authorities to decline to determine planning applications made by developers that failed to build out at a reasonable rate earlier permissions on any land in the authority’s area.

I thank the Minister for the information she has provided about sanctions and so on. I wait to see how firm those sanctions are. On the issue of local planning authorities having the power, basically, to dictate to a commercial enterprise what is developed on a site that the commercial enterprise owns, I would love to hear what powers the LPA will have in that regard.

The whole system is designed, after the LUR Bill, to be plan led. Therefore, planning applications should be in accordance with, first, national policies and, as importantly, local policies. If local policies say that you need, for example, houses for older people or disabled people, one should be agreeing only those planning applications that have those types of tenure within the developments that are coming forward through planning. If the system is plan led, I would have thought that the inspector should stick to the locally produced plan. On that basis, I hope this reassures the noble Baroness opposite that Amendment 261 is not necessary.

Amendment 269, tabled by the noble Lord, Lord Best, seeks to ensure that the development of large housing sites—defined as sites of 500 or more dwellings or more than five hectares in size where the predominant use will be housing, or designated as a large housing site within a development plan—is diversified in such a way that it provides a mix of new housing that reflects local needs, including social housing, in line with a local authority’s local plan requirements and national development management policies. While we agree with the sentiment of this amendment, we believe that there are better ways of achieving its objectives. The Government are of the view that diversification is best achieved by making this a stronger material planning consideration in the assessment of any housing application, and by requiring a buildout and diversification statement in all prescribed applications. We believe that this is best achieved via a new national development management policy, as that can be applied more flexibly compared to legislation and therefore address the different planning circumstances and housing needs that occur across the country, and that such a measure should not necessarily be limited to larger housing sites.

That is why the Government announced in December 2022—as part of the consultation Levelling-up and Regeneration Bill: Reforms to National Planning Policy—that developers will be required to explain how they propose to increase the diversity of housing tenures to maximise a development scheme’s absorption rate, which is the rate at which homes are sold or occupied. We invited views on the design of this policy, which will help to inform our thinking as part of our fuller review of national planning policy later this year. In these circumstances, while I very much agree with the objective of this amendment, there is a better way to achieve it via national planning policy, and I believe that it should be applied to a greater range of housing sites. This will ensure faster buildout rates and the diversification of those housing sites.

I am encouraged by the tone with which these issues are being approached. As regards the placing of penalties upon those who are not getting on with the job by refusing future applications from that firm, I can see some hazards here, not least if the delay is happening in one area and the applications for further schemes are somewhere completely different. Is this new power of withholding permission for new applications because you have been so slow in building out the ones you already have to be transferred from one local authority to another, or is it confined to a local authority acting only with regard to interests within its own boundaries?

I believe it is in one local authority, but I will check that. I will let the noble Lord know and make sure that everybody else in the Committee is aware.