Planning Bill

I am sorry if I misled the noble Lord. I meant to say that the charging schedule will probably be based on a notion of metrics, units. The unit would carry a particular charge, and that will be multiplied by the number of units. That does not mean households or anything like that. As I was saying, I hope that what I have to say will satisfy the noble Earl, Lord Caithness, on his amendment, Amendment No. 436BBA, which would impose a requirement for regulations to specify procedures for informing current and future land owners or developers how CIL will be calculated in individual cases. We have done precisely that; so I hope that that will meet his amendment. We all agree that the level at which CIL is set is crucial. Amendment No. 438CC would place the Secretary of State right at the heart of the CIL process, with powers to set the upper and lower limits of CIL that charging authorities must operate within and also, it appears, with discretion to allow authorities to operate outside those rules. The noble Earl has talked a great deal this afternoon about viability. In my introduction I addressed the points that he made in his amendment, and I share his concern. We have made it very clear that CIL is a flexible local level charge to be set as local circumstances dictate. Of course, it is important that effective safeguards are in place against excessively high CIL charges. The framework that the Government are establishing through the amendments will ensure that CIL does not choke off development. Government Amendments Nos. 438C and 438M, in particular, set out the key matters that charging authorities must take into account in setting their CIL and provide for the independent examination in public of the charging schedule. Those are strong safeguards, but the involvement of central government is not warranted. Subsection (2) of our Amendment No. 438C then sets out three key matters to which charging authorities will have regard; the regulations will follow that up in more detail. First, they will have to consider the actual and expected costs of infrastructure in their area. That will be the infrastructure needed to support implementation of the development strategy set out in their adopted development plan. It will be derived from the infrastructure planning they are required to undertake, in England, by planning policy statement 12 and, in Wales, by planning policy Wales. Secondly, charging authorities will have to have regard to the actual and expected increase in value that arises from the granting of planning permission. As we debated this morning, expressing the source of CIL funds in that way is difficult for some parts of the industry. We are in discussion and I will come back on that issue. CIL is not planning gain supplement, for the reasons that we know. If it were, individual development would be assessed and charged a nationally fixed percentage of the difference between the value of land before and after permission is granted. As I said, under CIL, charging authorities should estimate the broad likely uplifts in land value for their area and consider it on a strategic level. We all agree that assessment of viability is not a precise science, but it is essential that the charging authority should have to undertake it, to ensure that they do not risk impacting on the viability of development by setting too high a rate of CIL. Thirdly, charging authorities will have to have regard to the actual and expected sources of funding for the infrastructure identified. That includes from central, regional and local government grants. Although government Amendment No. 438C amends Clause 201 to provide certainty about the most important considerations that charging authorities must consider when setting CIL, Clause 201 previously allowed for other detailed factors to be specified in regulations. Our Amendment No. 438D amends that clause to ensure that this continues to be provided for. Government Amendments Nos. 438E to 438G are consequential on new subsections (1) and (2) in government Amendment No. 438C. They delete the paragraphs in subsection (3), the contents of which have been transferred to these new subsections. The noble Baroness, Lady Valentine, asked important questions. Her Amendment No. 438CA would require CIL to be calculated by reference to rates or criteria in a development plan document prepared by a local planning authority. She has argued that it should be part of the statutory planning framework. One unintended consequence of her amendment would be that CIL could not be applied by LPAs in Wales or at a strategic level in London. I recognise that stakeholders want reassurance that CIL will be managed as part of the planning system, but I cannot agree with her amendment. We intend the CIL charging schedule to be a legal document and part of the folder of documents that make up a local authority’s local development framework. We have discussed with the industry whether it is necessary for the CIL charging schedule to have the legal status of a development plan document. As the noble Baroness knows, we are after certainty, transparency and viability: hence the standardised charge. Under her proposition, however, the level of CIL would be subject to case-by-case negotiation. It would sit alongside Section 106 arrangements and would have to be part of that way of doing things. That is not what the industry wants. It would not be a sensible approach. We are very willing to continue working with the industry to see whether we can design a procedure that deals with exceptional circumstances in which a developer cannot afford to pay—I referred to that when I responded to the noble Lord, Lord Jenkin—but we are trying to get away from the sort of system where there is the right to negotiate levels of CIL in every case. Such a right would defeat the object of the entire exercise. As our August policy document made clear, we have, crucially, accepted that charging schedules should be prepared and tested to a standard equivalent to development plan documents. They must be robust and trusted, and there must be the opportunity to test them. The Government’s amendments go further than the industry has asked by setting out in primary legislation, not regulation, tough procedures that deal with the examination and approval of charging schedules and that will be binding on local authorities in the way in which the DPD is binding. This is a much better way of doing things than the noble Baroness’s amendment, and I ask her with respect not to press it. The noble Baroness’s Amendment No. 438HA would delete the reference to, "““values or expected values or in any other way””," in Clause 201(5). This clause provides that the CIL regulations can permit or require charging schedules to operate by reference to any measure of the amount or nature of the development. This relates to the question asked by the noble Lord, Lord Jenkin. This might be the floor space of the development, pounds per square metre of floor space, or intended use, and retail development might attract a higher charge than office development. Other options are specified. The amendment aims to narrow these options to prevent the CIL regulations that permit or require the charging schedule from operating by reference to, "““values or expected values or in any other way””." There is a residual fear that the clause might lead to a PGS by the back door. However, it simply allows us to explore with stakeholders how the charging schedule should best operate. Is a per-metre-of-floor-space charge the best approach? Would a charge that is somehow linked to other relevant values be better? These could include allowances to the developer to reflect other costs arising from the development, and the costs of a planning obligation requiring the construction of a road. The amendment would not allow us to explore that in any other way, and it could prevent us from adopting other people’s good ideas. I therefore ask her not to press it.