Examination of Witness (Questions 620-639)
PROFESSOR MALCOLM GRANT
WEDNESDAY 1 MAY 2002
620. If you are saying that structure plans have worked, why throw them away?
(Professor Grant) No, I am saying that the examination-in-public process has proved largely uncontroversial, not that the structure plans themselves have worked. The Government has taken a view that they have not and is proposing to scrap them. But may I just come back to the second part of my answer to Mr O'Brien, which is that the public local inquiry process, whilst it guarantees rights of appearance, should not be understood as properly representing all interests. I mean, not everybody goes to a local plan inquiry. Some of these inquiries take so long as to effectively disenfranchise people from participation because you cannot afford to be there every day for month after month.
621. It is not a question of people attending, it is a question of people being invited. It is suggested in the Green Paper that objectors will not be invited and therefore that is denying them their chance to put their case. This cannot be right.
(Professor Grant) But in exactly the same way as presently happens with examinations in public in structure plans. When we get to the detail, as I understand the Government's proposals, the detail comes forward in action plans. These action plans may be master plans for a particular area, for example, where you would expect that local people will wish to have a say. Another type of action plan would be, as I recall it, for a town or village.
622. That could apply to the Development Framework also but there would not be an inquiry.
(Professor Grant) I think that dilemma you have highlighted is absolutely right. What you must expect will happen is that the LDF will foreclose the range of discussion that may subsequently take place in the action plan. The LDF may well, for example, at a general level identify where areas of urban settlement are to occur.
623. You agree that that is not a good thing in this case.
(Professor Grant) I do not think we should be tempted into saying good or bad about components without having first prioritised the choices that we want to make.
624. Does it impact on the Human Rights Act?
(Professor Grant) I will come to that, but there is a trade-off, is there not, between being able to take decisions on a timely basis and produce policies that are up-to-date still at the time they are adopted, and, to do that, necessarily excluding from the decision-making process, in terms of hearing rights, people who might wish to be heard. They are not of course denied the capacity to make written representations or to participate in the political process in other ways; it is merely looking at the hearing part of the process overall. So it is a balance between time and formal legal rights of process. We have to make a trade-off. We can have rights of process which allow everybody to participate but it will take a long time to take decisions.
625. I am worried about our time if we are going to get all the issues in. Human rights, very briefly. Do you think it is in conflict with the Human Rights Act as it is proposed?
(Professor Grant) On this I would have welcomed more detail in the Green Paper. The Human Rights Act bears on planning processes in a number of ways, but the most important for our purposes this morning is Article 6, which is the right to a court, the right to a hearing. We could probably tie to that also Article 8, which is to do with protection of family life and the home and the First Protocol, Article 1, which is the right to protection of property. So far as we understand the application of the Convention so far to planning, it is perfectly clear that Article 6 would not apply purely to policy making. That is the result of the Alconbury decision. Where policy is being made, I think our courts would say that civil rights and obligations are not in play. But once we move across the spectrum to the point where policy is being applied to a site and so there is the need to assess the facts, then the Human Rights Act does come into play. That does not necessarily mean that in every case you have to have a hearing. The problem is it gets fuzzy at this point. The Alconbury case in the House of Lords helped to establish those principles I have just outlined. Subsequent litigation, including a case called Vetterlein, has taken the view that where it is objectors who are not landowners who are involved, objectors who maybe live some distance from the site, then it is not essential that there should be a public inquiry: an informal committee meeting or a hearing with the local authority may suffice to give them the "hearing" that Article 6 requires.
626. Professor, you have given us a fairly clear sense this morning and in the evidence that you have doubts about whether the public will react positively to the Government's proposals. If they go ahead and this is the new way for political decisions, do you think there is a risk that people will be less willing to accept decisions and, indeed, that decision making will be called into question? If so, how would that be resolved?
(Professor Grant) I think that is a very difficult political question that is probably more in your court than in mine. It is true that open processes that are painstaking can better be expected to command public respect than processes that are thought to be rushed and driven by a decision maker whose mind is already made up. I would, however, bring you back to the tension that exists between taking decisions that are useful and taking care over process. The best is often the enemy of the good.
627. The Government clearly thinks that public participation will actually deal with the issue. Would that be your view or not?
(Professor Grant) It is certainly not an across-the-board answer to everything. I think every member of this Committee knows just how disputatious planning disputes can be. The history of every local area is riddled with those disputes. We could look back on many of them and understand that some of them could have been much better handled from the beginning, and there are, I am sure, a number of examples where as a result of the developer and the planning authority working from the beginning with local communities and actually developing a positive sense of what people want, they can avoid the disputes that come afterwards. But that is a time-consuming and expensive process in itself. I would not have shared quite the Government's aspiration for that as a remedy for disputes across the planning system generally. To me, planning law is actually a dispute resolution machinery. That is one of its main objectives.
628. There is a big concern that if the Government gets this wrong then we risk seeing a huge surge in the number of judicial reviews, with all the costs that entails to local and regional authorities, the development community and, indeed, the objectors themselves.
(Professor Grant) Judicial review at the moment is a safety valve of the system. Its scope is very limited. All that the court can do is ask whether a decision has been made in law, including procedure. The Human Rights Act of course opened up further scope for more substantive review by the courts. It has been extensively used by third parties who at the moment have no right of appeal against the refusal of planning permission to the Minister. So that is the sense in which it becomes a safety valve. I would have thought that any change in procedures would excite a flurry of applications for judicial review but that those, as with the Human Rights Act, are likely to subside over time as the main issues become resolved.
629. When you say "over time" what are we talking about? Five years in which the new system beds down, works its way through the courts, so that for five years you get extra delays and then it might run smoothly?
(Professor Grant) I am not clear, Mr Chairman what is the implementation programme for the new system. Clearly the Government would want to have a smooth transition from old to new. Its introduction of new procedures and the holding of inquiries under them may therefore be four or five years hence anyway.
630. Professor, I am listening very carefully and I think your objection to this is that, firstly, the Green Paper does not set out clearly enough the alternatives in a way the public can discuss openlyyes?and then you move on to the difference between what is, in effect, strategy and the practical effects of planning decisions. Exactly how would you expect this Committee to interpret the Green Paper? Are you saying that if it set out the pros and cons of each argument, you would then be prepared to say we could at some point draw from that decisions?and your argument is that that is not done. Or are you saying that the area between strategy and the practical application of planning law is now so confused that there is no evidence that it would either (a) speed up the procedure, or (b) be fairer and clearer for the ordinary person to understand? Am I misunderstanding what you are telling me?
(Professor Grant) No. I think, with respect, you have put it very well. Could I just take the last of those issues which you raise, which is the spectrum issue. Any decision you are going to have to move from policy to planning decision. Different countries do it in different ways. The Americans front-load the policy and put it into a zoning plan, so that we then know if we have land in zone X that we can build to a certain density and all we need is a building permit. We back-load it, in a sense, because we have a highly discretionary development control system, so that whatever we say in policy can still be disapplied in development control if we think there are other material considerations which should disapply it. Nobodynot even the Government, I suspectis taking away the public inquiry at that point, but the public inquiry at that point applies only to developers, it does not apply to objectors, and the Green Paper is explicit that there should be no right of appeal to objectors. So the dilemma we all face is where back in the process do objectors have rights, not just rights of political participation (as I have put it in my written paper) but rights of legal process. It seems to me that there needs to be some pointand I have been trying slowly to get to it this morningwhich is around the action plans, because around the action plans I think one needs probably a rights-based process. But the balance for that, if you like, is that when you come back to the local development frameworks perhaps an examination in public is a more suitable procedure.
631. Do you think that the local development frameworks will bring the clarity that the Government wants?
(Professor Grant) Aspirationally, yes, they are capable of doing so. Of course all of the proof of this is in the detail. Criteria-based policies, as we know them in other contexts (for example, structure plans and also in local plans), are often aspirational, sometimes conflicting and inconsistent and sometimes so open-ended as to be of little value in decision making. So much depends on how they are formulated and what use it is that local authorities want to make of them. It seems to me that where the Government is on stronger ground in its proposals is in thinking through how to engage local communities in formulating local development frameworks and how to look positively at what an area actually wants. How they want to change, if they want to change. How they want to develop, if they want to develop. How they want to improve facilities. And then, from that process, to generate the criteria that will advance it. But, in all of these, sharp policies tend to generate opposition, loose policies diminish opposition, so you end up with the lowest common denominator.
632. Is this likely to lead to more appeals and challenges?
(Professor Grant) Appeals will continue to be led solely by unsuccessful applicants, so they will lead to more appeals if there are more unsuccessful applicants.
633. What about the Directive on strategic environmental assessment? You raised that issue in your written evidence. How do you see that relating to this?
(Professor Grant) That will come into effect in 2004. It will introduce a requirement for the strategic environmental assessment of plans and policies. I think the Government would argue that it is already largely compliant with the policy and legal requirements for preparing structure plans and local plans, but it will enhance the continuing obligation that the public should have at least political rights of participation in the process.
634. Are we going to get a development land tax? Is that really what the tariffs are?
(Professor Grant) Mr Chairman, in my paper I have set out five alternative interpretations of what the tariffs are, one of which is a development land tax.
635. That is why I am asking you.
(Professor Grant) I think a number of people would say a development land tax is actually what would best deliver the Government's objectives. But this is not specifically a development land tax in the way in which traditionally we have understood that. Traditionally we have understood that a development land tax was a tax on what we call the "incremental shift in value of land"; that is, a tax that is levied on an uplift in value over a period of time. Every transaction requires a capital valuation. In terms of efficiency, capital value taxes are probably the least efficient. The cost-yield ratio is far less efficient than, say, a simple tariff. When we talk about a tariff, Chairman, it seems to me we are looking for a surrogate measure of increased capital value. The clearest example at the moment is with affordable housing. Circular No 6 of 1998 and PPG3 will say that a developer will be expected to contribute a percentage of affordable housing when constructing a market housing scheme: 25 or 30 per cent. It is simply a surrogate for the uplift in land value. It is a tax.
636. It does not necessarily mean it is bad, though, does it? You are not saying that, you are saying that we are not openly identifying it.
(Professor Grant) Exactly that. Exactly that. But what I am also saying is that the consultation paper hints at these five different ways in which you might go about calculating the tariff. My real problem with it is that there is such obscurity about the central objective.
637. Do you have a firm view on which of those you would prefer?
(Professor Grant) I think that it is possible to devise a methodology that can meet the Government's main objectives. But we have got to be clear about what the objectives are. Let's just recite them briefly. First of all, they want to put planning obligations on a more robust and a more foreseeable basis. They want to make them more equitable and clearer. And they are conscious that planning obligations at the moment are not picking up on all instances of uplift in land value, so they are ineffective, inefficient, secret and all the other objections that we have got to them. If you are going to meet all those requirements, surely you need an open procedure and an open methodology? The methodology needs to look at what are the objectives of the process. The consultation paper hints at what those objectives are: certainly, providing more affordable housing and spreading that across a broader tax baseand not just private residential housing but also commercial and other development, which is of course entirely proper; indeed, I would have thought, much stronger arguments for using that as your tax base than private housing schemes. Secondly, that the object should be broader than impacts. Shall I explain? By impacts we mean the off-site costs of a particular development in terms of, let's say, transportation, etc. The Government would like to steer to a broader objective, which is sustainable development. Now, as I suggested in my paper, that at one level could be taken as suggesting that a large proportion of a local authority's capital budget could be caught in terms of sustainable development. So one needs a methodology: What is it that we want? What is its cost? How do we then rate some sort of budget back to particular sorts of developments? We may end up with a roof tax. Let us say £5,000 or £10,000 per dwelling house or per bed space, with a surrogate measure for commercial development which might be a sum per square metre of the development. That sort of measure gives a foreseeability that allows developers to factor it into their acquisition costs when they buy land. They already do this, of course. Every developer anticipates that there will be a planning obligations' cost and they hedge their bets by signing an option agreement which allows them to share that cost or to push the cost back to the landowner. So we can open that up quite clearly. What is essential, though, is that we have a methodology that will capture what the Government wants to capture and that will somehow factor those costs back. At the moment, the Green Paper has no hint of what that methodology may be and simply plucking a tariff out of the air in accordance with what the local market might be able to stand is, I think, intellectually inadequate.
Chairman: I understand the problem, that it is not clear, but there is also a question of equity, is there not? Some parts of the country are likely to generate very considerable amounts, whichever of the ways it is done, as a tariff or development tax, other parts of the country are not going to be able to generate anything like the same sums of money. Is that equitable? Or should there be some way in which the more affluent parts of the country should share some of the added value that they get for the development with the less well of?
Sir Paul Beresford
638. To put it more bluntly, some of us see it as the prospect of a Treasury-driven stealth tax in two years' time.
(Professor Grant) I think that is entirely likely. It would be unusual for a government, in settling the revenue support grant for local government, to overlook the fact that some areas were more able to level a tax called a planning tariff to meet their sustainable development costs.
639. So you think it will go in that direction?
(Professor Grant) I would have thought that is quite likely. I am only a humble lawyer, not a politician!
1 R.(Vetterlein) v. Hampshire County Council  J.P.L.289 (Sullivan J., June 14, 2001). Back