My Lords, I first thank noble Lords who have spoken on this group of amendments, which understandably have given rise to a number of questions. I shall do my best to address the various doubts and reservations that have been expressed, particularly those of my noble friends Lord Lansley and Lord Young of Cookham. As a general comment, however, I accept and acknowledge that there is uncertainty about the impact of the land auctions approach. That is why we are proposing a cautious power to explore the approach through time-limited pilots, with only a small number of local planning authorities that volunteer to do so participating. Only local planning authorities that volunteer to participate in the pilot will do so; if no local planning authorities volunteer, then the pilot will not happen.
As regards my noble friend’s lament that consultation has not yet taken place, he might have a point if we were proposing something compulsory for local authorities. We are not; we are proposing pilots that will be completely voluntary. That point is relevant also to my noble friend’s doubts about the capacity of local planning authorities to operate and handle a CLA. Local authorities that do not feel they are resourced to run a CLA will not have to do so.
I hope that we are united across the House in believing that it is important that the land value uplift associated with the allocation of land can be captured and put to good use for the benefit of communities. Notwithstanding the expressions of doom and scepticism from my noble friends, I am firmly of the view that community land auctions are a promising approach to doing just that. CLAs are designed as a process of price discovery that will incentivise landowners not to overprice the land that they are willing to sell.
This incentive should, we believe, have the effect of bearing down on land prices, which, in turn, should create greater scope for developer contributions and hence better value for local communities. The additional benefit to a local planning authority is certainty about the amount of land value uplift, rather than their having to make assumptions about values as they typically do at present. Certainty offered by CLA arrangements should make it easier for a local planning authority to set developer contributions, and easier for them to control housing supply. Therefore, removing these clauses from the Bill would mean losing out on an opportunity to test CLA arrangements as a potential new solution to the shortcomings of the current system.
The key questions posed by my noble friend Lord Young can, I think, be summarised as: what is to prevent a local planning authority giving undue preferential treatment to land in which they have a financial interest, either when drafting their local plan or when granting planning consents, and what transparency will there be around the process? I shall try to reassure my noble friend on those two issues.
First, I wholeheartedly agree that we cannot shift into a system in which planning permissions can, in effect, be bought and sold. That is why we are seeking to fully integrate community land auctions into the local plan-making process. There will be transparency, as the local plan will be prepared in consultation with the local community, with the proposed land allocations in the draft plan consulted on and independently examined in public, in accordance with the proposed new plan-making process.
As I have said previously, local planning authorities will need to consider many factors in addition to financial benefits when deciding to allocate land in their local plan. How, and the extent to which, financial considerations may be taken into account will be set out in CLA regulations. Moreover, once the local plan is adopted and sites are allocated, planning permission must still be sought in the usual way.
In the current system, local planning authorities already consider whether a site can viably achieve compliance with emerging policies when allocating land. Therefore, it is not unusual for local planning authorities to have to assess planning applications on
land that they have allocated and from which they expect to secure value in the form of developer contributions to mitigate the impacts of new development. It is also not unusual for local planning authorities to consider planning applications on land in which they have an interest or have previously held an interest. Therefore, while it is true to say that community land auctions are a novel and innovative approach, parallels exist within the current system.
We recognise there should be limits on how local planning authorities can use the receipts from community land auctions. We have set out controls on spending that broadly mirror those for the infrastructure levy, and we will set out more detail on what CLA receipts can be spent on in regulations.
We also recognise the importance of both public scrutiny and evaluation to ensure that we fully understand the impacts of the approach. For this reason, the powers are time-limited, expiring 10 years after the regulations are first made.
In summary, I hope that I have provided reassurance—