Select Committee on Transport, Local Government and the Regions Minutes of Evidence

Examination of Witnesses (Questions 860-879)



  860. Let us try to work out what X might be, in that case, because are not there a number of reasons why a tariff might be there, it might be to raise additional resources, particularly to process complicated applications, to help a local authority with that.
  (Lord Falconer) Money for the planning department?

  861. That might be one way of raising money, might it not?
  (Lord Falconer) I had envisaged that the tariff system would not be for process within the local authority; instead, it would be for specified matters, like infrastructure, housing, schools, etc.

  862. Within that then, there are different aspects, are there not, to any issue of planning gain; one is sort of the increase in the development value of the land, which the community might well like to share in, and that certainly might be very high on some sites, which developers are very keen on, quite low on brownfield sites, but we would not want to choke off development there? On the other hand was a need to reflect, in the costs of the development, which is extra highway costs, maybe extra school place costs, some way of getting the developer to pay. Is not that going to be quite a complicated system, to do all those sorts of things?
  (Lord Falconer) I do not know how complicated it would be; we very much hope that a simple system can be developed, and we would need to consult about the detail of the system. But there needs to be a system that reflects precisely the sorts of distinction that you are saying. It is vital that the tariff does not choke off development; that means, plainly, there are certain sites, because of the low land value and the lack of attractiveness to developers, that there would be little or no tariff, equally, there would be other sites, because of the high land value and the attractiveness to developers, that would attract a higher tariff. I also think you are right in the implication of your other question, which is, where you are dealing, for example, with a greenfield site, as opposed to a brownfield site, the tariff on a greenfield site should be higher than that on a brownfield site, to reflect the greater difficulty, very frequently, of developing brownfield sites. Now I do not think it is impossible to develop a system which would allow local authorities to work out what the appropriate tariff in their area should be, based on differing land values in one part of the country from another. The gain from doing it would be, once you had done that, you would have a clear and transparent system as to what was expected, and you would deal with the problem, which is the most commonly cited problem about 106 at the moment, which was nobody knows where they stand, it takes too long to negotiate, a long period of negotiation, quite frequently chokes off development, to the detriment both of the community and the developer.

  863. The scene you describe seems to be one as well that we are going to need a few extra resources and a few extra staff to do it, particularly, have we not got people now looking at training some valuers as well as some planners to make the system work better?
  (Lord Falconer) I do not think, and the people I have spoken to make this clear, that it is either impossible or a system that would be overly complicated to develop a tariff system, based upon central guidance, which local authorities would be able to apply.

  864. We are going to have more consultation on this?
  (Lord Falconer) I think there would be various possibilities as to precisely how you would do it, and there needs to be a consultation about the detailed matters.

Sir Paul Beresford

  865. Those local authorities with plenty of development and those local authorities with high value obviously are going to do quite well. How are you going to adjust it for those authorities that do not have development and have low values; will it be reflected in the tariff system, be redistributed, or will it be reflected in their grant?
  (Lord Falconer) Do you mean, do they get more money from central government if they have got low . . .

  866. I can quite see them trooping down from tougher areas of the country, saying, "We've got the needs; we haven't got the tariff"?
  (Lord Falconer) That is the current position; if you look at development in low land value areas, they cannot get the Section 106 agreements—

  867. We are changing the current system; are you going to reflect the change with the direct system, your tariff system?
  (Lord Falconer) The same pressures will exist on poorer land value areas as they do at the moment, namely, you are obviously going to get less tariff from poorer land value areas. Those poorer land value areas inevitably will be pressing central government for resources to reflect the difficulties that they are in.

  868. I have worked that out, actually, so have most of us; what are you going to say to them?
  (Lord Falconer) I do not think changing from Section 106 to a tariff system fundamentally changes that issue.


  869. Do I gather that the tariff system is going to be on a sliding scale, depending on your success with the Chancellor, so tariffs start very low, if you have success with the Chancellor, and they steadily move up?
  (Lord Falconer) No; that was not what I was saying. I was saying that the tariff system has to reflect differing land values in different parts of the country, because a tariff sustainable, and you know this, in one part of the country would not be sustainable in another part of the country.

  870. So at what sort of levels do you think tariffs could be set?
  (Lord Falconer) I do not know. I think one needs to do a considerable amount of work in relation to actually setting what the figures are, and I do not want to, without having a proper basis for saying what the precise levels will be.

  871. In your negotiations with the Chancellor, presumably you have made some suggestions as to the sort of income you could make from tariffs?
  (Lord Falconer) As I say, I think it is best if I do not, as it were, go into any detail in relation to—

  872. I was not asking for detail, just a broadbrush would do nicely?
  (Lord Falconer) Or even a broadbrush.

Helen Jackson

  873. Just to finish off that money bit, I really do not understand why you do not accept there is a fourth option, of better integration between the various disciplines and professions within authorities at present, of developers and valuers and planners?
  (Lord Falconer) I am sorry, if and insofar as you thought my answer—

  874. You might like to clarify?
  (Lord Falconer) Was saying that I was rejecting that option, I was not. I was simply trying to say, and I did not make it clear, there is always going to have to be some element of an independent planning department in every local authority, for reasons of propriety and the way that the system works. That does not mean that there cannot be very considerable savings and efficiencies from a better-integrated operation of the system within a local authority.

  875. That is helpful.
  (Mr Ash) Can I make a point. One of the key Green Paper proposals is that the Local Development Framework becomes a spatial strategy, as opposed to being a narrow, land use strategy; now that, in itself, means that there will be greater integration between these various parts of the local authority that you talk about, in order that the spatial implications of what they are doing is reflected in that Local Development Framework. So it will encourage that process. Can I also make a point about resource prioritisation within local authorities. I think there is an important point to be made here, which is that one of the reasons why it gets a low priority at the moment, the development plans process in particular, is because of all the problems that the Minister has already pointed to, about delay and the length of time it takes to put things in place. If local authorities really believed that this was central to their activity, was flexible and could deliver what they wanted in their core strategy, they would give it higher priority and they would put more resources into it; that is part of the thinking behind the ideas for changing the way the system operates that we put forward.

Sir Paul Beresford

  876. Mr Ash, you and I know local authorities better than that, and you also know they will come straight back to you and say that, "The priorities are set upon us by Government, we are forced to go and meet these and put the money in sight of them and there." So are you going to overcome it by putting this as yet another priority, or are you going to take some of the pressure on local government and other areas off them?
  (Mr Ash) I cannot speak for the other areas, but we will give planning a better chance, is what I will say.
  (Lord Falconer) There is always a dialogue, is there not, between central government and local government, in relation to how they spend their money. I want to make it absolutely clear, ultimately, in relation to unring-fenced grant, and planning is unring-fenced grant, we have no intention of changing that, it is for them to identify what their priorities are. But I think it is perfectly legitimate for central government to say, "I think, in some cases, what you are saying about other priorities does not justify the low amount of money that you are spending on planning."

  877. Just before we leave this, on tariffs, can we be assured that the fears that many local authorities have, that those authorities that receive a high funding from tariffs will not have that reflected in the diminishment in their central government grant, or grant in any other way, in other words, this betterment tax of yours will not be used by the Treasury, through you, to bring in another stealth tax?
  (Lord Falconer) It is not a tax, it is not a stealth tax.

  878. It seems awfully like it?
  (Lord Falconer) As far as the amount of money given to local authorities is concerned, it is currently done on a formulaic basis, which takes no account either of Section 106 or tariffs, and there is currently a process going on where the allocation of local government money is being readdressed, and an announcement is going to be made sometime in the future, in relation to that. I do not envisage that that formula would include taking account of tariffs received.

  879. It was not quite a yes or no, it was a maybe?
  (Lord Falconer) It was still, I think, a pretty clear answer, that tariffs did not play a part in the formula.


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