Planning Bill

I wish to touch on some of the points raised by my noble friend Lord Cameron. I turn to my four amendments in this group, which are in two pairs—Amendments Nos. 438EA and 438HA and Amendments Nos. 438CA and 438CB—because they tackle two specific points on how CIL should be set. My previous amendments related to the purpose of CIL. These amendments concern how local authorities go about establishing CIL. I will briefly touch on some of my previous comments, because they also apply here. I am extremely grateful for the Minister’s indication that we can continue to discuss some of these issues. My overall point is that CIL should be set at the right level to fund infrastructure and at a level appropriate to the prevailing economic conditions. CIL should take account of overall development viability in an area and not be linked to any increase in land value arising from the grant of planning permission. Amendment No. 438EA seeks that local authorities should take account of development viability when setting the CIL by ensuring it is not set at a level that would stop land being brought forward for development. If CIL is set too high, landowners will not make their land available. Therefore, the test for the appropriate level of CIL should be that it will still allow the land needed for development plan priorities to come forward. Amendment No. 438HA removes the reference to land value increase in relation to local authority CIL charging schedules. I have already argued that taxing increases in land value should not form part of the purpose of CIL, nor be a consideration for local authorities when setting CIL. If land value is used as a reference point, it will inevitably become the basis upon which CIL is allocated between different land uses, rather than the demands each use places on infrastructure—a point which the noble Lord, Lord Jenkin, has made. This will mean that uses, such as retail, which generate the highest land value increases, will bear a disproportionate burden, irrespective of their impact on the infrastructure. As I understand it, that is not the purpose of CIL. Amendments Nos. 438EA and 438HA set out to change the mechanism for assessing CIL—the viability of development and its impact on infrastructure. The amendments also seek to change the language to that used in the planning system, rather than the tax system. My second pair of amendments, Amendments Nos. 438CA and 438CB, propose that the setting and charging of CIL should be done through the development plan process. It is simply common sense that if CIL is to work efficiently and effectively, the development plan, the cornerstone of the planning system, must be used as the structure through which it is formulated, tested, and charged. Without these amendments the unintended consequence of the current drafting is that development which is acceptable in planning terms could be refused planning permission if it is unable viably to meet the full cost of CIL. It is only through incorporating CIL in the development plan process that there is any hope of the levy being independently and robustly tested, and applied in a reasonable way to planning decisions. At present, the clauses make no reference to the planning process by which the CIL should be determined. The Government’s August 2008 publication on CIL suggests that the charging schedule will be part of the local development framework. Crucially, the report suggests that the charging schedule will not obtain the status of a development plan document. If this is the case, there will be a number of negative consequences for the robustness of the CIL system. If, on the other hand, the CIL charging schedule were to be a development plan document, the resulting CIL policies would have the full weight of the statutory planning system behind them. This would allow the local authority to take full account of the viability of a development when deciding whether to grant planning permission and, in exceptional cases, to vary the CIL to ensure viability. In particular, for instance, there are brownfield, mixed-use regeneration schemes, like King’s Cross, where the development, while desirable and meeting many planning objectives, may be unable to bear the full cost of CIL without becoming unviable. In these exceptional cases, it is vital that the local authority has discretion to reduce the CIL charge and that this is done within the existing structures of the development plan. In such a case, were the local authority not to grant planning permission on the grounds that the development was unable to pay the full CIL, the applicant could appeal to the planning inspectorate against refusal, and there would be a proper process for resolving the issue and evaluating the proposed development. We must not allow for the formulation of unnecessary bureaucracy to deal with these exceptional cases when a perfectly adequate and well respected system exists already—the development plan.