Levelling Up and Regeneration Bill, Remaining Stages, House of Commons, 13 December 2022

• The Levelling Up and Regeneration Bill acts upon long running asks from councils and the LGA for further devolution in England. We are pleased that the Government has proposed to speed up the process and make good on its commitment to offer all of England the opportunity to benefit from a devolution deal by 2030. It is also important that councils of all sizes are engaged in the devolution process.
• The Bill includes (Part 1, Clause 4) information on draft metrics proposed in the Levelling Up White Paper to measure progress towards the twelve missions. This is a good first step, but they still fall short of the full breadth of what is needed to create thriving and inclusive communities. The LGA is supporting amendments which ensure that progress towards the missions is followed closely.
• We support the measures, set out in clauses 72 and 73 of the Bill, which give councils more power to charge premium council tax for long term empty and second homes as it will give councils more power to influence local housing markets.
• We are deeply concerned that the proposed risk-mitigation measures in clause 71 of the Bill potentially give the Secretary of State significant powers to intervene in a local authority. There is a danger that the formula-based approach outlined in the Bill could impact more widely than intended. It is vital that the Government undertakes full engagement with the sector, including full consultation before enacting the regulations arising from the Bill. Advice from the sector could assist the Government in preserving the key concept of prudential borrowing while ensuring the new arrangements address genuine government concerns. We therefore supported amendment 45, tabled by Alex Norris MP, which would ensure that the Government undertakes a consultation with all local authorities before making regulations for all the subsections of 12b (2). We welcomed assurances from the Minister that the government would consult more widely before laying the regulations and look forward to hearing further detail.
• The LGA supports the Government’s plans to introduce a permanent pavement licensing regime. It is welcome that officials at the Department for Levelling Up, Housing and Communities (DLUHC) have engaged with councils to make improvements to the temporary regime and that this Bill increases pavement licence fees, provides a longer consultation and determination period, and improved enforcement powers for councils. However, we would support amendments to create a specific offence for pavement licence breaches to enable councils to take effective enforcement action.
• Clause 74 sets conditions for councils when changing street names. The LGA is seeking to remove the clauses in the Bill, and replace with new clauses which allow for Regulations to be laid (or statutory guidance published), requiring local authorities to undertake a referendum in order to change street names, including setting out the precise detail for how those referenda should be run (for instance, who would be eligible to vote on an alteration; the threshold needed for the number of residents to vote; and the threshold needed for supporting the alteration). The LGA proposed alternative clauses which would require local authorities to consult residents and the wider community before making changes to street names, and to have regard to the outcomes, allowing flexibility over the method adopted to consult. The original clause would be unworkable in practice and too narrow as it may exclude those who use a street but not live there. The Minister has given assurances that the Government will be setting out clear, transparent and robust arrangements for the consultation process in secondary legislation.

Planning

• Councils are broadly supportive of the guiding principles of the planning reforms, to embed a plan-led system; empowering local leaders and communities; with stronger regeneration powers; and a stronger framework for protecting and enhancing the environment. However, some detail is needed ensure these guiding principles can be applied in practice. We want to work with the government to support the effective implementation of the reforms and ensure that the reforms are a success for local government. We want to work with the government to support the effective implementation of the reforms and ensure that the reforms are a success for local government.
• The Levelling Up and Regeneration Bill also introduces a number of reforms to the planning system:
  • A new Infrastructure Levy. We welcome the government’s stated commitment to ensure that the new Infrastructure Levy will be non-negotiable and set locally. But if we are seeking to improve the system, then the Levy must deliver more affordable housing than the current Section 106 system including those homes lost as a result of viability. It is vital that new occupants of homes and wider communities get the infrastructure they need, and that councils can access sufficient funding for this infrastructure in line with the ambition in Local Plans. We would therefore urge the government to reconsider the timing of the Levy. To enable sufficient financing to deliver the necessary infrastructure set out in local plans, there must be a financial mechanism to secure upfront infrastructure at an earlier stage than the point of occupation. We look forward to responding to the consultation on the Levy and councils would welcome the opportunity to work with the Government to develop the detail of this reform.
  • New powers for councils to bring vacant properties back into use. This high street rental auction power is an encouraging step, and we will work with the Government to ensure that it is simple, inexpensive and effective for councils to use.
  • A proposal to introduce a new approach to environmental assessment, we will be taking action to ensure that it strengthens environmental protections whilst ensuring that councils can still deliver the new homes and supporting infrastructure that the country needs.
  • Changes to neighbourhood planning and digitalising the system in an attempt to make local plans more accessible.
• Supporting councils to build a new generation of high-quality, energy efficient council homes also has to be a national priority if levelling-up ambitions are to be met. This needs to include urgent reform of the Right to Buy scheme to allow councils to keep 100 per cent of receipts from sales of homes and the ability to set discounts locally. We have worked with MPs to seek an amendment which would remove all clauses relating to the sale of vacant higher value local authority housing in the Housing and Planning Act 2016 (Clauses 69-79). This will implement the Government’s commitment to not take forward the powers to require councils to sell higher value council homes outlined in the Social Housing Green Paper (Page 8) – “We will not require local authorities to make a payment in respect of their vacant higher value council homes and are exploring new flexibilities over how they spend Right to Buy receipts.”
• The Secretary of State’s Written Ministerial Statement of 06 December 2022 asserted that the National Development Management Policies will not constrain the ability of local areas to set policies on specific local issues. However, in reality local plans will be constrained in the event that they conflict with National Development Management Policies, in which case the latter will take precedence. We have previously sought an amendment to reverse this proposal so that local plans will take precedence in the event of conflict. This is critical to ensure that that one of the key principles of the planning reforms - ‘a genuinely plan-led system’ - is enshrined in the Bill. Further, local plans are subject to robust and extensive testing during its preparation with communities, which includes a thorough examination process to establish its soundness. Therefore, local plans should carry full legal weight and particularly over policies and plans that is not subject to the same level of scrutiny. But if the government decides to retain the current proposal, then flexibility must be built into the system to enable councils to respond to local, complex and changing circumstances. This is because we are concerned that setting generic planning policies at national level will leave councils unable to tailor such policies to local circumstances. The policy must be workable at local level.
• Councils are committed to working with government and developers to build the housing the country needs, with land for more than 2.6 million homes allocated in local plans and nine in 10 planning applications being approved. However, more than 1 million homes that have been granted planning permission are still to be built out. The introduction of commencement notices in the Bill is a welcome starting point for addressing the ongoing challenges around build-out of schemes following planning permission. It is good that this measure will be introduced alongside powers for councils to deter and tackle non-compliance, including the possibility of a fine. We welcome the Secretary of State’s commitment to bring forward additional measures to tackle slow build-out. Specifically, we would welcome the introduction of powers to allow councils to charge full council tax for every unbuilt development from the point the original planning permission expires. It should also be made easier for councils to use compulsory purchase powers to acquire stalled housing sites or sites where developers do not build out to timescales contractually agreed with a local planning authority.
• We broadly welcome the announcement to remove the requirement for a rolling five-year land supply as it will curb speculative development and it will give more weight to local plans when making decisions on planning applications. However, we urge the Government to urgently revoke Permitted Development Rights in order to strengthen the role of local plans. As a result of Permitted Development Rights, more than 18,000 affordable homes have been lost and therefore this policy is at odds with the national ambition to increase the supply of affordable housing.
• The introduction of measures that will genuinely make the Compulsory Purchase Order (CPO) process more streamlined and efficient for councils is an encouraging step. It is good the government has stated its intention to reform the Land Compensation Act (1961) to diminish the hope value (the term used to describe the market value of land based on the expectation of getting planning permission for development on it) and allow councils to purchase land closer to its existing use value, which will make CPOs less costly for councils to use . However, we urge the government to remove the hope value entirely from the Land Compensation Act so that land can be purchased at its existing use value. This will ensure that compensation is fair and compulsory purchase orders can be used more easily by councils, when necessary, as a last resort.
• We support the principle of councils being able to set up locally-led urban development corporations for the purpose of supporting regeneration projects and also the principle of being directly accountable to councils, rather than the Secretary of State. It is good that the cap on the number of board members and the aggregate borrowing cap are to be removed. We have long been calling for the removal of the borrowing cap, which limits the scope of Development Corporations, creates uncertainty about investment beyond the cap and affects the delivery of Local Plans. We would also welcome powers to enable the creation of zero carbon and nature-rich places; the power to use a CPO; and ensure there is clear guidance and policy support in place for councils looking to establish successful Development Corporations.
• We welcome the confirmation by the Secretary of State that although targets will remain, they will be a starting point with a flexibility to take account of local circumstances. This is because the algorithms and formulas used by the Standard Method can never be a substitute for local knowledge and decision-making by councils and communities who know their areas best. We also welcome the commitment to consult on how the targets can better take account of local density. We need to increase and accelerate the delivery of affordable housing – largely at social rent. It is our view that 100,000 new social rented home per annum is required to meet the housing needs of communities. We recognise that if advisory housing targets are to hold any credibility, those targets must be realistic and achievable. Therefore, advisory housing targets must be aligned – and must continue to be re-aligned going forward – with the latest population projection data published by the Office for National Statistics. The principle in planning of using the most up to date evidence must always be upheld. The most recent 2022 projection, which is based on the population estimate from 2020, indicates that population forecasts for both mid-2030 and mid-2045 are at its lowest point in eight years.
• Councils must have the flexibility to set planning fees at local level, or at the very least be able to vary planning fees and charges to cover their costs relating to planning, which could include the employment of qualified planners. This would put councils in a stronger position to address the issue of resourcing in the planning sector including a shortage of qualified planners. Planning fees do not cover the true cost of processing planning applications. Taxpayers currently subsidise the cost at a rate of nearly £180 million a year. Councils need the ability to recover the costs of processing applications, and therefore should be able to charge an appropriate fee. Therefore, while we welcome the increase in planning fees alongside the Bill, it does not go far enough to deliver a well-resourced planning sector.

LGA view on Amendment relating to the sale of vacant higher value local authority housing

The LGA supports this new clause. This will implement the Government’s commitment to not take forward the powers to require councils to sell higher value council homes outlined in the Social Housing Green Paper (Page 8) – “We will not require local authorities to make a payment in respect of their vacant higher value council homes and are exploring new flexibilities over how they spend Right to Buy receipts.”

LGA view on Amendment relating to payment in respect of their vacant higher value council homes

• The LGA supports this new clause. It will protect Housing Revenue Accounts from additional expenditure requirements, at the expense of other key national policy commitments. It will allow councils to prioritise funding the delivery of key policy objectives such as decarbonisation, fire and building safety compliance, increasing the supply of social housing and maintaining existing stock. At a time when the Government is seeking to further constrain HRA income via a rent cap, placing additional and unnecessary expenditure needs on HRAs is not in the interest of social housing residents and homeless households on waiting lists.

LGA view on Amendment relating to permitted development rights

• The LGA supports this amendment. We would welcome a review of the impact of permitted development rights (PDR) within 12 months of the introduction of the Act. There is much to welcome in the Bill, however it is at odds with the existence of the PDR policy – including the Government’s principles on a genuinely plan-led system and empowering local leaders and communities. If the Government is serious about ensuring that local plans are not undermined, then we would urge the Government to revoke permitted development rights which disenfranchises local leaders and communities. 

• We know that PDR has undermined housing targets, with more than 18,000 affordable houses have been lost as a result of office-to-residential conversions under permitted development. In addition, we are concerned about the quality of developments implemented via PDR, as developments that go through the planning system are subject to more stringent quality assurance.  

• The removal of PDR would empower councils to realise the ambitions set out in the Bill including reimagining high streets and town centres. 

LGA view on Amendments relating to resources and skills in planning authorities

• The LGA supports this. It is a positive and welcome step that the Government has committed to improving capacity in the sector through skills development. The planning skills strategy must be implemented quickly and it is right that a reporting mechanism is in place, with its findings and lessons learnt acted upon to ensure planning departments have sufficient resources.

• Councils have expressed concerns regarding their stretched capacity and the difficulty of accessing the relevant skills and expertise to implement local plans. With a renewed emphasis in the Levelling Up and Regeneration Bill on empowering communities, councils will need the right the level of resource to carry out the meaningful community engagement critical to achieving good planning and will need to be properly resourced for any additional burdens due to any changes to the planning system going forward.

• In addition, although we welcome the proposed increase in planning fees, the government could go further to support a well-resourced planning system by allowing councils to set planning fees at local level. The proposed increase on its own will not be enough to comprehensively address the issue of resourcing in the planning sector. Councils need the ability to recover the costs of processing applications, and therefore should be able to charge an appropriate fee.

NC122, tabled by Clive Betts MP would require the Secretary of State to review resources and skills within local planning authorities and those potentially available to them such as Planning Performance Agreements and to report the findings to Parliament.

• The LGA supports this. It is a positive and welcome step that the Government has committed to improving capacity in the sector through skills development. The planning skills strategy must be implemented quickly and it is right that a reporting mechanism is in place, with its findings and lessons learnt acted upon to ensure planning departments have sufficient resources.
• Councils have expressed concerns regarding their stretched capacity and the difficulty of accessing the relevant skills and expertise to implement local plans. With a renewed emphasis in the Levelling Up and Regeneration Bill on empowering communities, councils will need the right the level of resource to carry out the meaningful community engagement critical to achieving good planning and will need to be properly resourced for any additional burdens due to any changes to the planning system going forward.
• In addition, although we welcome the proposed increase in planning fees, the government could go further to support a well-resourced planning system by allowing councils to set planning fees at local level. The proposed increase on its own will not be enough to comprehensively address the issue of resourcing in the planning sector. Councils need the ability to recover the costs of processing applications, and therefore should be able to charge an appropriate fee.

• The LGA support this. We welcome the proposed increase in planning fees, as it has for a long time been our position that there is a need for a well-resourced planning system. This reform must be implemented quickly. However, the government could go further to support a well-resourced planning system by allowing councils to set planning fees at local level. The proposed increase on its own will not be enough to comprehensively address the issue of resourcing in the planning sector. Councils need the ability to recover the costs of processing applications, and therefore should be able to charge an appropriate fee.

• The LGA supports this amendment. As we move to the new Levy system and discard the Section 106 system for schemes that are not categorised as ‘large sites’, it is important that all provision delivered through Section 106 is not lost and continues to be delivered via the Levy. The wording of the Bill needs to specify this.
• We are concerned that an unintended consequence of the Bill may be the omission of some of the provision that is delivered through Section 106 agreements but does not obviously fall into the definition of “infrastructure” which is set out in the legislation. This may include apprenticeships, skills development, supporting the local workforce, supporting young people into employment, etc. 

• The LGA supports this amendment. Councils must have certainty about how to administer the Levy in relation to retrospective planning applications.
• Certainty on this issue will allow councils to better manage their cash flows to deliver the necessary infrastructure set out in local plans.

• It is vital that new occupants of homes and wider communities get the infrastructure they need, and that councils can access sufficient funding for this infrastructure in line with the ambition in Local Plans. We would therefore urge the government to reconsider the timing of the Levy. To enable sufficient financing to deliver the necessary infrastructure set out in local plans, there must be a financial mechanism to secure upfront infrastructure at an earlier stage than the point of occupation

• The national supply of housing is currently not sufficient to meet the housing need. We need to increase and accelerate the delivery of affordable housing – largely at social rent; and currently Section 106 agreements are a major source of affordable housing delivery. Therefore, it is our view that if we are genuinely seeking to improve the system through the introduction of the Infrastructure Levy, then it must deliver the levels of affordable housing as set out in local plan policies – rather than the existing lower levels we actually see delivered through the current Section 106 system, as a result of continuing use of viability assessments to negotiate down affordable housing provision.

• We welcome the confirmation by the Secretary of State that although targets will remain, they will be a starting point with a flexibility to take account of local circumstances. This is because the algorithms and formulas used by the Standard Method can never be a substitute for local knowledge and decision-making by councils and communities who know their areas best. We also welcome the commitment to consult on how the targets can better take account of local density.

LGA view on Amendments relating to planning permission

• The LGA supports this. We would support innovative powers being brought forward to enable councils to incentivise a timely build-out of development.

• We know that if we are to deliver the homes the country needs, it’s crucial that councils work with developers to build the homes that the country needs at pace. Planning is not the barrier to housebuilding with nine in 10 applications being approved by councils since 2010.

• The LGA has previous lobbied for councils to have the power to charge a Levy on developers that are withholding land by not building out within 12 months of planning permission being granted.

• We would urge the Government as a matter of urgency to empower councils to take decisive action on this issue.

LGA view on Amendment relating to plan-led system

• The LGA supports this amendment. It is vital that a local, plan-led planning system underpinned by ongoing community engagement remains in place. Development should not undermine local plans.

• It is clear that through the Bill, the government is seeking to empower local leaders and communities to shape the area in which they live and work. This amendment will further embed these principles.

LGA view on Amendment relating to registration of short-term rental properties

• The LGA supports this new clause. This follows on from a public call for evidence on whether there was a need for greater regulation of this sector.

• The LGA and member councils submitted evidence outlining the impact that unregulated lets were having on local areas, including increasing house prices, placing pressure on expensive reactive services like noise management, and risks reputational damage to the place as a destination.

LGA view on Amendments relating to street votes

• We do not support the proposals for street votes as it could add another layer of complexity to the planning system, stifling the production and implementation of local plans and the delivery of affordable housing.

• We want to work with the government to enhance opportunities for engagement and reach a wider audience within the process of developing local plans.

• But if street votes are to be introduced we would support measures that allow street votes to be used as a mechanism to meet the affordable housing and infrastructure needs of communities set out in local plans.

• We welcome the Bill’s commitment to strengthen the critical role the planning system plays in protecting the historic environment and the general commitment to the current local authority led heritage protection system.

LGA view on Amendments relating to resourcing in the planning sector

• The LGA supports this new clause. It is well-documented that the planning sector is experiencing resourcing challenges. While we welcome the proposed increase in planning fees, this increase on its own will not be enough to comprehensively address the issue of resourcing in the planning sector.

LGA view on Amendment relating to energy efficiency measures

• There is a need for greater clarity, advice and support on how residential listed properties can improve their energy efficiency and decarbonise space and water heating while protecting the listed status.

• This is support that would be helpful to residents, to industry, to local authorities and their planning teams, and to other bodies protecting and promoting heritage.

• The amendment does not provide any detail on what this might look like and how it would work, we would be pleased to engage to explore the detail.

LGA view on Amendment relating to solar panels

• The LGA supports the Future Homes Standard for new homes, as this standard is a vital tool for achieving national net zero by 2050.

• Councils have a vital role to play in supporting the delivery of the country’s net zero mission and it is right that councils are able to set and require the higher energy efficiency standard for new homes.

• We are supportive of proposals which seek to enhance the technical standards of the FHS, which in addition to decarbonising homes, will improve housing quality, create more resilient communities and support the growth of supply chains.

• Any new requirements for the installation of carbon technology should be included in the FHS.

• It is vital that the government continues to work with councils to ensure the implementation of the standard is done with the consumer and the property in mind and seeks to address any challenges associated with capability, capacity and cost.

LGA view on NC15

• We support this amendment. It reflects LGA’s past calls to ensure building regulations include mandatory flood protection measures in new builds such as raised electrical sockets, fuse boxes and sealed floors.

LGA view on NC16

• The LGA does not support this amendment. We are concerned that local authorities are already facing funding and resourcing pressures, and this would place an additional duty on councils to publish data.

• We are additionally unsure of how much data councils would be able to provide on flood risk. Residents are already able to request data from the Environment Agency about the flooding history of their property, and many councils provide flood risk maps and data to guide residents. Data from strategic level flood risk assessments may not be suitable for use at the individual property level.

LGA view on Amendments relating to virtual council meetings

• We support this new clause. The LGA has long been calling for urgent legislation for councils to have the flexibility to meet virtually and we responded to the Government’s consultation on remote meetings in June 2021.

• Over the course of the pandemic, councils conducted all of their council business remotely. Councils reported to us that virtual meetings allowed for critical decisions to be made democratically and without delay during this emergency period.

• Key benefits include the resilience of democratic processes and reduced reliance on delegating decisions to officers in times of crisis and flexibility, resulting in better councillor attendance and drastically increased resident engagement with council meetings.

• Councils also noted that physical meetings can be a barrier to attendance for some individuals and that virtual meetings can be more accessible. People with caring responsibilities or working commitments can find virtual meetings easier to access and attending virtually can be the only way some disabled people can access meetings - this applies to residents and councillors alike.
• If the flexibility to hold online meetings is restored to councils it is essential that the Government avoids being overly prescriptive about the circumstances under which councils can use virtual and hybrid meeting formats.

• Councils and councillors are best placed to decide how and when to use different meetings formats to balance the advantages and disadvantages of different meeting options and reflect the variety of local authority types and governance arrangements. Councils will need considerable flexibility for local determination as to how and when to utilise virtual and hybrid meetings to ensure they can realise the benefits of different meeting options to suit their local context.

We continue to urge the Government to publish the findings of the consultation as quickly as possible.

Laura Johnson, Public Affairs and Campaigns Adviser

[email protected]