My Lords, this has been an incredibly wide-ranging, detailed and at times passionate debate, particularly in the contributions
from the noble Lords, Lord Greenhalgh and Lord Russell of Liverpool. We are all under no illusions that this is a radical change in policy, and therefore it deserves the detailed scrutiny that noble Lords are giving it over three groups today.
We are told that
“The aim of the Infrastructure Levy is to create a fairer and simpler system of developer contributions, which will ultimately capture more value for local authorities and local communities”.
Who does not agree with that? Unfortunately, the more I have read and tried to get to grips with it, the more complex it becomes and, particularly following this debate, I believe there are legitimate questions as to whether this proposal will succeed in its aims.
Listening to noble Lords, it seems that the impetus for many of the amendments, such as Amendments 290, 335—to which I have added my name—336 and 348 and the many in the name of the noble Lord, Lord Greenhalgh, reflect the extent to which noble Lords are concerned that the current financial situations of many councils will lead them to spend the infrastructure levy on a wider range of social infrastructure, leaving less for other infrastructure. Conversely, other noble Lords are seeking to see if they can spend it on said items. Amendment 343, in the name of the noble Baroness, Lady Hayman of Ullock, seeks to broaden the scope of what infrastructure means. In Amendments 315 and 316, she probed—via the noble Baroness, Lady Taylor, of course—what should be spent on transport. Transport is surely a no-brainer if we are seeking sustainable development.
However, I am concerned that we are trying to get so much out of the infrastructure levy to make up for the real issue, which is over a decade of underfunding for councils. I say very firmly that we support the need for government to ring-fence money for social housing because we believe that this is a national housing crisis, but we feel very strongly that there should be real autonomy for councils to meet their own identified needs with the rest of the levy. I hope the Minister will be able to clarify not only the apportionment of money, but crucially, the power and autonomy of charging authorities in spending the cash raised. My noble friend Lord Shipley and the noble Baroness, Lady Taylor of Stevenage, made a very clear case about the need for up-front moneys, which I hope the Government will take seriously.
So much of this seems to hinge on the infrastructure development strategy. I say to the Minister that I am sure it would help us all if we had more detail about what is expected to be in it. I would value clarification about who signs it off, where it will sit—presumably in the local plan—and its particular relationship to other local plan policies and the NDMPs.
In two-tier areas, CIL has been really controversial, with county councils being concerned or even angry with the levels of CIL set by their districts. The noble Baroness, Lady Taylor of Stevenage, being both a county councillor and a district leader, will be aware of this tension in Hertfordshire. I am still not sure where the power lies in the final decisions about the priorities within that strategy. I expect it will be in forthcoming guidance, but it will be an area of challenge, from the top combined authorities down to parishes.
Amendment 348, supported by the noble Earl, Lord Lytton, argues for a proportion of the neighbourhood allocation of the levy for parishes. Do we yet know what constitutes a neighbourhood or, perhaps, a parish? It seems to me that districts will be very much piggy in the middle in two-tier areas, with much work to do in collaboration and consultation on an area-wide strategy. They will need capacity and support to do this effectively, which is why the Government’s approach of test and learn seems to be the right one. However, can I make a plea? In asking for councils to volunteer, there is a danger that only positively motivated councils will come forward. Perhaps the department could cast around for a two-tier area that has struggled with CIL to get a more accurate picture.
1.15 pm
Several tensions were expressed in the amendments in the name of the noble Lord, Lord Best, regarding the role of the appointed examiner relating to charging levels. His message was a detailed critique, but his overarching message was very clear: keep it simple. The setting of levels is clearly at the heart of whether this is a success. It is very technical and an issue which ultimately determines whether the levy will fulfil its promise to raise more money than the current system.
Yet the work carried out by Liverpool University exploring the different types of authorities and how much each would yield in relation to current levels of CIL and Section 106 provided very interesting evidence—probably what we all know. There is more scope to capture more value on greenfield sites in areas with higher development value—in other words, in rural villages and leafy suburbs with high house prices. I am intrigued as to how this finding sits with the Secretary of State’s declarations regarding green-belt development. Yet again, to those who already have a lot shall more be given. Of course, the work also found the reverse to be true; brownfield sites in areas with low-value housing may even find themselves in the infrastructure equivalent of negative equity. There are no prizes for guessing where most of these sorts of areas are. My question to the Minister is: how will this inequality of councils’ actual ability to raise the levy be dealt with? Have there been any adjustments as a result of this research, which they quite rightly commissioned?
All of this and more has led me into thinking about whether this levy is actually going to do what it aspires to, whether it is worth the risks involved and the 10-year timeframe it will take to deliver. But there will be more of that in later groups. We will also probe in a later group how this relates to the crucial area of affordable and social housing. Much more will be said about that, but it has been kicked off well today by the amendments in the name of the noble Lord, Lord Best, which we broadly support.