My Lords, we have a very busy day ahead of us on this Bill. Given the large number of topics, and the fact that we need to try to get through as many of them as possible, I respectfully ask and remind all Members to be as brief as possible today. Thank you.
Clause 120: Fees for certain services in relation to nationally significant infrastructure 20 projects
225: Clause 120, page 152, leave out lines 21 to 26
Member's explanatory statement
This amendment removes subsection (4) of the new section 54A of the Planning Act 2008, being inserted by Clause 120, which contains a restriction on prescribed public authorities from charging fees where the advice, information or assistance is provided to certain excluded persons.
My Lords, I shall speak also to the other 15 government amendments in this group. Amendment 225 to Clause 120 of the Bill, along with Amendments 226 and 227, are minor and technical. In developing NSIP applications, applicants are required to consult statutory consultees who provide expert advice to ensure that infrastructure is delivered in a way that supports our objectives, including those around enhancing the natural environment, public safety and protecting historic assets.
Clause 120 provides a power for the Secretary of State to make regulations to set up a charging regime for specific statutory consultees to recover their costs for the services they provide to applicants when engaging on NSIP applications. Our policy objective is to ensure that applicants should pay for advice from specific statutory consultees throughout the consenting process, and to support statutory consultees to achieve full cost recovery for their services.
Exemptions in subsections (4) and (6) of the new section inserted by Clause 120 were originally included to ensure that excluded persons were not liable for the costs of advice provided to them, so that regulations could make it clear that the applicant bears liability for such costs. However, through discussions with relevant statutory consultees, it has become clear that these subsections would also prevent applicants being charged where the Secretary of State engages with statutory consultees directly. Therefore, the clause would prevent specific statutory consultees recovering costs requested by an excluded person—even from applicants—in a timely way that supports faster decisions on applications for development consent.
To ensure that the clause delivers our policy aims, I propose that new subsection (4), and in consequence, a number of excluded persons defined in new subsection (6), be removed. The removal of these exemptions is required to achieve our original policy intention, whereby statutory consultees should be able to obtain full cost recovery for the provision of their services in relation to NSIPs, regardless of the person to whom those services are provided.
My Lords, I will speak briefly to my Amendment 227A on an issue the Minister has already touched on: enabling statutory consultees, such as Natural England, Historic England and the Environment Agency, to charge both planning decision-makers and applicants for the advice they are required to give. That is, as the Minister noted, a valuable part of the planning system which supports the Government’s aspirations on growth and environmental sustainability.
Currently, this work is funded from statutory consultees’ ordinary budgets, and the growth in planning applications means that more and more money is drained from those ordinary budgets and away from their ordinary and very necessary work. The statutory consultees have tried to become as efficient as possible to cope, but the cost to them is now £50 million a year, and 60% of that is borne by Natural England and the Environment Agency. I declare my interests as a former chairman of Natural England’s predecessor and a former chief executive of the Environment Agency. In effect, that means that the planning system is operating with a hidden subsidy at the statutory consultees’ expense, with the major focus being on the planning proposals which present the greatest potential environmental impact due to their size and location—inevitably, those cost the most money for the statutory bodies to inquire into and report on.
As the Minister said, Clause 120 introduces charging for nationally strategic infrastructure projects, but it does not cover ordinary Town and Country Planning Act casework. I thank both Ministers, the noble Baroness, Lady Scott of Bybrook, and the noble Earl, Lord Howe, for their assiduity and flexibility in discussing that with me and others. They have made some limited concessions, but, at the end of the day, I ask the Government: why is there not a level playing field between Town and Country Planning Act casework and casework for nationally strategic infrastructure projects? That would resolve the issue for the statutory consultees.
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My amendment would put charging for casework for town and country planning applications—to give advice to local planning authorities on statutory development plans, environmental assessments and other planning work—on the same basis as the NSIP work, overcoming the issue that is currently problematic. Much as I have examined it—and many are the conversations I have had with both Ministers—I cannot see any logical reason for the charging systems to be different, so I hope that the Government will now accept my amendment.
My Lords, I remind the House of my relevant interests as a councillor and a vice-president of the Local Government Association.
Throughout the debates on the Bill, we have all agreed on the importance of having a plan-led approach to development. Therefore, an effective local authority planning service is key to implementing timely decisions on planning applications. The House of Commons Levelling Up, Housing and Communities Select Committee issued a report on planning reforms earlier this year. The report stated that the National Audit Office found that local authority planning services had been cut by £1.3 billion over a 10-year period to 2020, which equates to a 55% reduction in service spending. That is from the National Audit Office, so we cannot argue with those figures.
A Local Government Association survey in 2022 found that 58% of councils had trouble in recruiting planners—and, in county councils, that rose to 83%. The Royal Town Planning Institute estimates that one in 10 planning officer posts are not currently filled. From my own experience in my council, I know that senior planners are enticed into the private sector, leaving councils less well equipped to deal with complex applications. The enormous stress on planning services has the consequence of putting an additional delay on development, which adds programming problems for housebuilders and developers of commercial units. Amendment 235 in my name and that of the noble Lord, Lord Young of Cookham—who I thank for adding his name to an amendment on issues that we both raised separately in Committee—would insert a new clause to address those practical issues. It would enable a local planning authority to set a level of fee that covers the costs of a planning application.
I appreciate that the Government have agreed to increase planning fees by 35% for major applications and by 25% for all other applications. Of course, that is a step in the right direction. However, nationally set fees fail to take into account regional differences in costs; they also fail to reflect the actual costs of dealing with very complex developments, either very large housing sites or commercial developments.
My Lords, I have added my name to Amendment 235, which I proposed in Committee and to which the noble Baroness, Lady Pinnock, has just spoken. Since Committee, the need for it has become more urgent, as reflected in the report of the Levelling Up, Housing and Communities Select Committee in July, which concluded:
“The Government’s reforms to national planning policy will fail if local authorities lack sufficient resources to implement them. The package of support which the Government has outlined does not go far enough to address the significant resourcing challenges which local authorities currently face”.
I support the amendment for two reasons. First, I do not believe that the Government should be controlling the fees charged by planning departments, as a matter of principle. They do not control other local authority fees—building regulations, parking fees, library charges, school meals, swimming pool charges—so why planning? A national cap does not reflect the different circumstances of local authorities.
The case for relinquishing control is made stronger by the aspirations in the levelling up White Paper, with its commitment to
“usher in a revolution in local democracy”.
The revolution is stopped in its tracks by the notion that local authorities should not be free to recover the costs of their planning departments.
In reply to my amendment in Committee, my noble friend the Minister said that
“having different fees creates inconsistency, more complexity and unfairness for applicants, who could be required to pay different fee levels for the same type of development. Planning fees provide clarity and consistency for local authorities, developers and home owners”.—[Official Report, 24/4/23; col. 1003.]
Let me briefly dissect that. As far as local authorities are concerned, they are the ones who sponsored my original amendment. They have since confirmed their continuing support with this statement:
My Lords, before I talk about the amendments, I take this opportunity, on Back British Farming Day, to pay tribute to and celebrate our wonderful farmers across the country—a big thank you to them.
I draw noble Lords’ attention to my interests in the register: I am now vice-president of the LGA, vice-president of the District Councils’ Network and a serving councillor in both Stevenage and Hertfordshire.
As the Minister mentioned, the government amendments in this group are technical and consequential and I do not intend to comment on them other than to link some of his comments to the other amendments.
My noble friend Lady Young’s Amendment 227A is a sensible proposal that those organisations charged with providing supporting advice to planning applications should be able to recover fees for that advice directly from applicants. For too long, the weight of providing specialist advice has fallen on the public purse or on the budgets of hard-pressed third sector organisations, as my noble friend outlined so clearly. Anyone looking at this from the outside would consider that to be unreasonable. I hope that the Government will consider my noble friend’s amendment and take it seriously. Indeed, the noble Earl, Lord Howe, said that there should be full cost recovery for NSIPs. We need to think about that amendment and the one that I will talk about in a moment and how we create a level playing field in this respect.
Amendment 235 in the names of the noble Baroness, Lady Pinnock, and the noble Lord, Lord Young, seems to me the no-brainer of the Bill. For many years, the LGA has been campaigning for local authorities to be able to charge full cost recovery in relation to the actual cost of processing applications. A government report proposed this in 2010, following a consultation by Arup that demonstrated the extent to which councils are undercharging for planning under the current fixed-fee system. The noble Baroness, Lady Pinnock, quoted the figure, which was from 2021; I expect that it is a lot more now and probably way over £250 million a year.
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The noble Baroness, Lady Pinnock, set out clearly some of the serious impact on planning departments and the noble Lord, Lord Young, referred to the apposite conclusion of the Levelling Up, Housing and Communities Select Committee. As he rightly pointed out, it is a principle of devolution—something that the Bill sets out to espouse—that councils must be able to do their own thing for charging fees. That would enable them to resource their planning departments properly. It seems that again the Government are more interested in protecting the pockets of developers than in protecting the public purse, so if the noble Baroness, Lady Pinnock, chooses to divide the House, she will have our support.
My Lords, Amendment 227A in the name of the noble Baroness, Lady Young of Old Scone, seeks to impose a requirement on the Secretary of State to bring forward regulations under Clause 128 that will enable statutory consultees to charge applicants for their advice on planning applications and consents under the planning Acts. I appreciate that our Amendments 229 and 230 do not go as far as the noble Baroness, Lady Young, might like. However, given the complexity of statutory consultee charging—it is a complex field—in our view it would be unwise to rush into a radically different set of arrangements. The changes that she proposes have the potential to impose financial impacts on applicants, in particular home owners and SMEs, and they could severely affect local planning authority capacity and its ability to make timely decisions. We need to ensure that an appropriate balance is reached with any charging model.
To put that into context, there are around 28 statutory consultees prescribed nationally and around 50,000 applications a year that the big six national statutory consultees comment on. That does not include local statutory consultees, such as highways authorities. Therefore, we will need a system that works for everyone, not just a select few, and this will need to be worked through carefully and collaboratively with the sector. Against that background, I hope that the noble Baroness will see why we are reluctant to rush into the model that she proposes and that she will in fact decide not to move her Amendment 227A on that account.
Amendment 235, in the name of the noble Baroness, Lady Pinnock, would enable local authorities to set their own planning application fees. I understand how important it is for local planning authorities to have the resources that they need to deliver an effective planning service. On 20 July, we laid regulations, as she mentioned, that will increase planning fees by 35% for the major applications and 25% for all other applications. This is a national fee increase that will benefit all local planning authorities in England. In addition to the 35% increase, local planning authorities may charge fees for providing pre-application advice or using pre-planning agreements for major schemes. Fee levels for those services are set by individual local planning authorities. It is important to factor that point into noble Lords’ consideration of this issue.
Before the noble Earl sits down—I thank him for the reply—can he just confirm that the Government are willing for council tax payers to subsidise planning applications, which are often very big applications? That is often where the fee discrepancy occurs, with very big housing developments or commercial developments. Is the noble Earl happy for the Government to see council tax payers subsidising those planning applications?
The noble Baroness’s question has a lot of hypotheses built into it. As she knows, local government funding is not just a matter of fees being charged and council tax being levied; there is of course support from central government as well. I suggest that it is very difficult to generalise in the way that she is asking me to. However, I say respectfully that she ought to remember too that local authorities can charge more for more complex cases, so there is flexibility in that sense.
Amendment 225 agreed.
Amendments 226 and 227
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I now turn briefly to government Amendments 229 and 230. In Committee, we introduced an amendment to allow prescribed bodies named in regulations to charge fees for providing advice or information in connection with applications or proposals under the planning Acts, as defined in Section 336 of the Town and Country Planning Act 1990, which is now Clause 128 of the Bill. In Committee, the noble Baroness, Lady Parminter, eloquently set out on behalf of the noble Baronesses, Lady Young of Old Scone and Lady Hayman of Ullock, that the exclusion in new subsection (3)(b) on charging for advice provided to planning decision-makers could have the effect of inhibiting charging where applicants enter into a voluntary agreement with statutory consultees to provide advice or assistance as part of the planning application.
It is obviously not the intention of the power to disincentivise proactive and early engagement between applicants and statutory consultees or prevent statutory consultees charging where an applicant has voluntarily paid for a premium service—quite the opposite. On larger-scale proposals, there may be a need to have sustained and ongoing engagement with statutory consultees. So, as with the NSIP charging powers, we have listened and are making changes to address the issues raised. Through Amendments 229 and 230, we are changing Clause 128. These changes will have the effect of removing new subsections (3)(b) and (5), which provide for the exclusion. This should allay any concerns over the scope of our charging power and will allow us to work through the model of statutory consultee charging with the sector, through regulations. I should add that we have engaged with Defra, which sponsors Natural England, and the Environment Agency, and they see this amendment as a positive step forward.
All the other government amendments in this group, starting with Amendment 263A, are consequential to the marine licensing cost recovery powers. Clause 214 as introduced, which is now Clause 222, gave the Secretary of State new powers to make regulations which set the level of fees payable for post-consent marine licence monitoring, variations and transfers, where the Secretary of State is the appropriate marine licensing authority under the Marine and Coastal Access Act 2009. We are now extending those powers to Scottish Ministers, where the Scottish Ministers are the appropriate licensing authority under that Act in the Scottish offshore region, to avoid a legislative gap. In conclusion, the amendments are important as they remove any potential uncertainty as to the nature and scope of our cost recovery powers for statutory consultees and ensure that they can be made more effective. I beg to move.
This national approach to fee setting results in council tax payers subsidising complex planning applications. That cannot be right. The stark fact is that 305 out of 343 local authority planning departments had a deficit totalling £245.4 million in 2020 and 2021. That is a huge sum, where council tax payers are subsidising housebuilding developers, for example, who are well able to meet the costs of a planning application in full.
In addition, of course, there are the Government amendments that the noble Earl, Lord Howe, has spoken about this morning, which are a good step forward in conceding the argument made by the noble Baroness, Lady Young of Old Scone, about statutory consultees being paid for the work that they do—that is right and proper. But this adds to the bill that local authority planning services have to pay and it adds to the cost. All in all, there will be additional costs for the work being done. I think that the Government have made some concessions to the principle that the noble Baroness, Lady Young, has asked about and I support that. I wish that they had gone further, as she argues, but it is one step in the right direction.
I will of course listen carefully to the response from the Minister to Amendment 235, but I feel strongly about this issue. It is not a matter of principle; it is a practical amendment to enable local authority planning services to provide the service that they are required to do and that they want to do, but for which they need the funds to do. If the Minister is unable to concede that principle, I will be minded at the appropriate stage to test the opinion of the House on this matter.
“We support this amendment. Planning fees do not cover the true cost of processing planning applications. In 2020/21, 305 out of 343 local authority planning departments operated in a deficit, which totalled £245.4 million”.
As far as developers are concerned, they already have to cope with myriad different local plans and can well manage different fees. What the developers want are well-resourced planning departments that can effectively process their applications quickly. One of the reasons for the disappointing housebuilding performance is planning delays. The amendment addresses that. As for home owners, I do not think that they know that planning fees are set centrally and they are used to local authorities having different charges for libraries, parking, allotments and the rest. I do not think that they would mind if fees were set locally, as long as they got a good service.
Secondly, I do not think it right that council tax payers should have to subsidise the planning system—the hidden subsidy referred to by the noble Baroness, Lady Young. There are more important calls on those resources, underlined by the financial problems facing Birmingham City Council. The Minister told us that the Government were consulting on increasing the fees, but in the words of the Local Government Association:
“We welcome the Government’s commitment to increase planning application fees. However, our modelling has shown that even if all application fees were uplifted by 35 per cent, the overall national shortfall for 2020/21 would have remained above £80 million”.
In his opening speech, my noble friend referred on several occasions to full-cost recovery for provision of services. That is exactly what this amendment does.
I conclude by quoting the Times, which recently, on 7 July, summed up the position:
“Britain’s planning system is grinding to a halt, with four out of five big applications now being delayed by up to two years.
Official figures show that more than half a million new developments have been delayed during the past five years as threadbare planning departments struggle to cope with even routine cases.
Industry experts said the delays were exacerbating the housing crisis, with developments now taking up to three years to get started. Councils are supposed to give developers a decision on big projects within 13 weeks, but the latest official data shows that only 19% of applications were processed in this time over the past year, down from 57% 10 years ago … Developers say that performance is damaging efforts to tackle the housing crisis and other government priorities such as installing wind and solar farms. They warn that unless the government insists on proper funding for planning departments, the housing crisis will worsen as councils will always choose refuse collections over planning when allocating scarce resources.”
The noble Baroness, Lady Pinnock, has made a powerful case and I hope that the Government will reflect in their reply on the further measures that are now needed.
Of all the problems in the planning system, this seems the simplest to resolve. Over time, it would enable authorities to recruit the number of planners that they need and it would shift the cost burden of planning from the local taxpayer to the developer, who, after all, will receive the benefit of the application. I can only quote from my experience of a major town centre regeneration scheme. There were two years of planning discussions on the scheme and then literally a vanload of papers for the application when it came in, and we have just three planners in my local authority. That shows the kind of pressure on the system. Local authority budgets are more hard-pressed than they ever were, so it is hard to imagine why the Government would not accept that full cost recovery should be a basic principle of planning and that it is up to local authorities to charge their own costs.
The Government do not believe that enabling local planning authorities to vary fees and charges is the way to answer resourcing issues, for several reasons. First, it does not provide any incentive to tackle inefficiencies—indeed, the opposite is true. I am not sure that I heard that point addressed either by my noble friend or by the noble Baroness, Lady Pinnock. Secondly, I have to come back to the point that the Government argued in Committee. Having different fees between local authorities would be bound to create uncertainty and, perhaps more importantly, unfairness for applicants. We have to be cognisant of the need for fairness. It is all very well for my noble friend to say that applicants will not notice if fees vary between areas. It is a question of doing what is right for all parties and not just feeding the wishes of local authorities in this area, understandable as those are, as I said. Also, at an extreme, if fees are set too high, they could risk doing what I am sure the noble Baroness, Lady Pinnock, does not want, which is to discourage development coming forward in the first place. For those reasons, I am afraid that I must resist the amendment and I hope that, on reflection, the noble Baroness will be persuaded not to move it when we reach it.