Levelling Up and Regeneration Bill, Committee Stage, House of Lords, 10 and 22 March 2023

• 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.
• However, we are seeking an amendment which would ensure that demographic disparities are also addressed as part of the levelling-up agenda. Research published by the Local Government Association, A vision for urban growth and recovery, indicates that the health and economic welfare of BAME residents and young people in urban areas was put at greater risk by the coronavirus pandemic.  While the Government's ambition to address regional disparities between places is laudable, we remain concerned that particular communities within places will continue to experience economic and social disadvantage unless demographic disparities are also addressed as part of the levelling up agenda.  
• We support the measures, set out in clauses 75 and 76 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 74 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 an amendment in Commons Committee stages 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 as the Bill enters the Lords.
• 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 the creation of a specific offence of breach of a pavement licence, and for this to be dealt with by a fixed penalty notice rather than by the power to seize and store furniture, which is what councils are currently expected to do. Some councils have concerns about the logistical challenges associated with the current enforcement provisions in the Bill.
• Clause 77 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 would require local authorities to consult residents and the wider community before making changes to street names, and to have regard to the outcomes, but allow flexibility over the method adopted to consult. As the Bill continues in the Lords, we will still be looking to encourage Government to make these changes to the Bill. The original clause is unworkable in practice and too narrow and prescriptive as it may exclude those who use a street but not live there. It is welcome the Minister has given assurances that the Government will be setting out clear, transparent and robust arrangements for the consultation process in secondary legislation.
• In the final stages, the Government tabled a new clause 210 which makes regulations requiring or permitting the registration of specified “short-term rental properties”. At Remaining Stages, the Government confirmed they will be consulting on this issue, and hope to bring in legislation as a result. This change to the Bill is welcome as LGA and member councils submitted evidence outlining the impact that unregulated lets were having on local areas.
• Also in the final stages, the Government introduced new clauses which create an obligation on water companies to go further to address nutrient pollution and clean up our rivers. We have concerns that these clauses only apply to water companies in England. This is a problem for councils on the border with Wales (the Wye and Lugg river catchments) as Welsh water companies could continue to discharge sewage that ends up in England. We ask the Government to clarify how this clause would work for water companies on the border with England and Wales.
• In addition, these clauses only impact water companies, although agriculture is a significant source of pollution. In 2021, the Environment Agency reported that about 70 per cent of total inputs of nitrates in water came from agriculture, with the secondary contributor nationally being sewage effluent at 25-30 per cent.
• The LGA is supporting an amendment tabled by Lord Young of Cookham (Conservative) which would ensure that all pavement licences are smoke free. This will set a level playing field for hospitality venues across the country, ensure outdoor drinking and dining is a family friendly environment and have the added public health benefit of protecting people from unwanted second-hand smoke. Prohibiting smoking in an area where a pavement licence has been granted will also make the legislation clearer for businesses and easier for licensing authorities to enforce. 

• 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.
• 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 with the objective of ensuring that it is simple, inexpensive and effective for councils to use.
  • A proposal to introduce a new approach to environmental assessment. We will work with the Government to ensure 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 order to make local plans more accessible.

• We support Lord Best’s (Crossbench) amendment to 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).

• The Secretary of State’s Written Ministerial Statement of 6 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 are 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. 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. However, it would be helpful to have clarity about what “advisory” means in practice. 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 is why we are supporting Amendment 267 tabled by Lord Young of Cookham which would allow councils to set planning fees locally. 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. Therefore, while we welcome the Government’s commitment to increase planning fees alongside the Bill, it does not go far enough to deliver a well-resourced planning sector.

Amendment relating to the sale of higher value council homes

Amendment 438 tabled by Vice-President Lord Best (Crossbench) would remove all sections relating to the sale of vacant higher value local authority housing in the Housing and Planning Act 2016 (sections 69 to 79).

• The LGA supports this amendment as it 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.”

Amendment relating to street votes

Amendment 248 tabled by Lord Young of Cookham (Conservative) and LGA Vice-President Baroness Thornhill (Liberal Democrat) provides guidance on how to solve a conflict between a street vote and development plan.

• The LGA supports this amendment. It is conceivable that unplanned, unforeseen street voting may conflict with the development plan. The legislation must provide a steer on how to resolve this conflict.
• The development plan is supposed to act as the masterplan for development at local level and should therefore take primacy. If ad hoc street voting were to take primacy, this would undermine the rights of residents that participated in the plan-making stage for the development plan, as well as the principle of a plan-led system which is the centrepiece of the Government’s reforms.

Amendment relating to planning fees

Amendment 267 tabled by Lord Young of Cookham (Conservative) and LGA Vice-President Baroness Thornhill (Liberal Democrat) would allow local authorities to develop a planning fees schedule that would enable the full costs of delivering its development management services, including the processing of planning applications, to be recovered.

• The LGA welcomes the government’s commitment to increase planning fees, as it has for a long time been our position that there is a need for a well-resourced planning system. However, the proposed increase for major and minor applications of 35% and 25% respectively will not on its own enough to comprehensively address the issue of resourcing in the planning sector.
• We support this amendment as it would enable local authorities to set planning fees at a local level, including those for dealing with permitted development applications and discharge of planning conditions. This would enable councils to deliver responsive council planning services that are crucial to growth and building the homes we need.

Amendments relating to local plans and Infrastructure Levy

Two amendments (344 and 350) and tabled by LGA Vice-President Lord Best (Crossbench) would tie the application of the Infrastructure Levy to the level of affordable housing requirement identified in the local development plan.

• A local, plan-led planning system must remain in place. The Government has stated that the Infrastructure Levy will be set locally and non-negotiable, which we welcome.
• Assuming this commitment is upheld and to ensure that the housing needs of communities are met, the application of the Infrastructure Levy must be in accordance with the local development plan.
• The LGA wants to work with the government to ensure the Infrastructure Levy is a success. If the objective is to improve on the current Section 106 and Community Infrastructure Levy system, then the new Infrastructure Levy must deliver proportionately more affordable housing at local authority level than the current system would have delivered. This includes the affordable housing that has been lost as a result of viability.

Amendment relating to national development management policies (NDMPs)

Amendment 187 tabled by Baroness Hayman of Ullock (Labour) would place limits on the primacy of NDMPs over the development plan where a CCA had been handed planning, highways, environmental powers and at least one function of another public body under a devolution deal, in areas covered by a joint spatial development strategy and in Greater London.

• The LGA supports the principle of this amendment in ensuring that any conflict between the development plan and national development management policies should be resolved in favour of the development plan.
• Local development plans are subject to robust and extensive testing during its preparation, which includes a thorough examination process to establish its soundness. Therefore, the development plan should carry full legal weight and particularly over policies and plans that are not subject to the same level of scrutiny.
• We would like to see this principle being applied to all local development plans, not just where a Combined County Authority had been handed planning, highways, environmental powers and at least one function of another public body under a devolution deal, in areas covered by a joint spatial development strategy and in Greater London.

Amendment 192 tabled by Baroness Hayman of Ullock (Labour)

This amendment probes what will take precedence if the development plan conflicts with the NDMP. It does this by proposing that the development plan has precedence over any national development management policy in the event of any conflict between the two.

• The LGA supports this amendment. This amendment would ensure that one of the key principles of the planning reforms - ‘a genuinely plan-led system’ - is enshrined in the Bill.
• The amendment supports local democracy underpinned by community engagement. The local development plan is subject to robust and extensive testing during its preparation, which includes a thorough examination process to establish its soundness. Therefore, the development plan should carry full legal weight and particularly over policies and plans that is not subject to the same level of scrutiny.
• In addition, the development plan addresses specific local issues that meet the needs of communities that live in that local area. In contrast, the national development management policy will cover generic planning issues. Therefore, the amendment ensures that planning policy will be tailored to local circumstances and that the rights of communities that have shaped the local development plan are upheld.

Amendment relating to planning data

Amendment 182 tabled by Baroness Taylor of Stevenage (Labour). This amendment would mean that the Secretary of State may only make planning data regulations which contain provision relating to local authorities after consulting with local authorities.

• The LGA supports this amendment. It is right that where new regulations are introduced that relate to local authorities, that they should only be introduced following consultation with local authorities. This will help to ensure that they are fit-for-purpose, that any new burdens are identified and addressed and to avoid any unintended consequences of implementation.

Amendment relating to planning permission

Amendment 261 tabled by Baroness Taylor of Ullock (Labour) would enable the issuance of completion notices withdrawing planning permission with a deadline of less than 12 months when certain conditions are met, and enable completion notices to require that building works be removed from a site or a site be reinstated to its previous condition.

• The LGA supports this amendment. This would give local authorities additional flexibility to expedite the withdrawal of planning permissions in specific circumstances.

Amendment relating to “agent of change principle”

Amendment 266 tabled by Baroness McIntosh (Conservative) and Baroness Henig (Labour), that would enshrine the “agent of change principle” in law. This is the principle requiring planning policies and decisions to ensure that new development can be integrated effectively with existing businesses and community facilities so that those businesses and facilities do not have unreasonable restrictions placed on them as a result of developments permitted after they were established.

• The LGA supports the proposal to enshrine the ‘Agent of Change’ principle in law. This will build on the 2018 update to the National Planning Policy Framework which included detailed reference to the ‘Agent of Change’ principle and also the update to the section 182 guidance in 2022, which accompanies the Licensing Act 2003.
• New development can have the potential to cause tension within communities where there are already established licensed premises, particularly those that promote live music. These venues can provide an important cultural contribution to an area, as well as promoting the next generation of musicians. Agent of change means those bringing about a change take responsibility for its impact. It means that developers are responsible for identifying and solving any sound problems, if granted permission to build housing near existing venues, to help avoid music venues, community and sports clubs and even churches running into expensive issues as a result of complaints from new neighbours
• We would expect that a noise impact assessment is also accompanied by a detailed mitigation plan.

Amendment relating to resourcing in planning departments

Amendment 281 tabled by Baroness Taylor of Stevenage (Labour). This amendment would require the Secretary of State to provide sufficient additional resources to local planning authorities to enable them to implement the changes required by Chapter 5 of Part 3.

• The LGA supports this amendment as all new burdens relating to any new duties arising out of the Bill should be fully funded by the government.

Amendments relating to holiday lets and second homes

Two amendments (264 and 265) tabled by Lord Foster of Bath (Liberal Democrat) and LGA Vice-President Lord Shipley (Liberal Democrat) would create a new use class for second homes and a new use class for holiday rentals.

• The LGA supports these measures, which would give local authorities greater powers to shape local housing markets and strengthen local oversight of changes in accommodation in an area.

Amendments relating to long-term empty dwellings

Amendment 168 tabled by Baroness Taylor of Stevenage (Labour) removes the one-year lead in period relating to Clause 76 on long term empty dwellings.

• The LGA supports this amendment. Councils have told the LGA that they would want to use the clause at the earliest possible opportunity.
• As the Bill currently stands, the Government will have to give a financial years’ notice after the Bill becomes law, and if the Bill is not law by 1 April 2023, the earliest the premium can be applied is 1 April 2025.

Amendment relating to smoke free pavements

Amendment tabled by Lord Young of Cookham (Conservative) which would ensure that all pavement licences are smoke free.

• The LGA supports this amendment as it will set a level playing field for hospitality venues across the country, ensure outdoor drinking and dining is a family friendly environment and have the added public health benefit of protecting people from unwanted second-hand smoke.
• Prohibiting smoking in an area where a pavement licence has been granted will also make the legislation clearer for businesses and easier for licensing authorities to enforce.

Amendment relating to audit

Amendment 84 tabled by LGA Vice-President Lord Shipley (Liberal Democrat), that aims to enhance public confidence in the audit process by increasing the number of independent people on the audit committee.

• The LGA supports this amendment. The use of independent co-opted members on audit committees can be helpful in providing expertise and capacity which supports elected members of audit committees in achieving assurance.
• The constitutional rules should still require the majority of audit committee members to be elected members. This is for two reasons (a) audit committees are fulfilling a role delegated by elected members in general who are jointly and severally ‘those charged with governance’, and (b) elected members represent the community and are in a unique position not enjoyed by independent co-optees to understand what the concerns of local people are in relation to assurance. For similar reasons, ideally audit committee chairs ought to be elected representatives.
• Auditors have sometimes told us that co-opted members get too much deference from elected members of the committee. That is another reason for making sure that the meeting dynamic is essentially one of elected representatives supported by co-optees.
• The issue of remuneration arises. The more demand there is for co-optees, the more likely it will be necessary to pay higher stipends for their services.
• It is sometimes said that there is insufficient supply of suitable individuals to fill all co-opted roles. We suspect that is overstated and the real issue is market reach and remuneration.

Amendment relating to the Fair Funding Review

Amendment 172 tabled by Baroness Taylor of Stevenage (Labour) which would ensure the Secretary of State publishes the Fair Funding Review within a year of this act receiving Royal Assent.

• When the Fair Funding Review is published, we would urge the Government to ensure there is enough time for formal consultation with local authorities.
• When the Review does happen, it needs to consider both the data and the formulas used to distribute funding and the Government needs to ensure that overall local government funding is sufficient when new needs formulae are introduced. This will ensure that no council sees its funding reduced and that there are transitional arrangements for any business rates reset.

Amendment relating to remote meetings

New Clause 158 tabled by Baroness Mcintosh of Pickering (Conservative) would enable local authorities to meet virtually. It is based on regulation 5 of the Local Authorities and Police and Crime Panels (Coronavirus) (Flexibility of Local Authority and Police and Crime Panel Meetings) (England and Wales) Regulations 2020, made under section 78 of the Coronavirus Act 2020.

• The LGA supports this new clause. The LGA has been long calling for urgent legislation for all remote council meetings 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. Disabled people and people with caring responsibilities or working commitments can find virtual meetings easier to access; 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: [email protected]