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

Memorandum by Professor Malcolm Grant (PGP 64)


  1.  I am grateful to the Committee for their request that I should attend to give oral evidence to this inquiry, and their invitation to me to submit a brief written statement in advance. By way of background, I am Pro-Vice Chancellor and Professor of Land Economy in the University of Cambridge and a Fellow of Clare College. I am a barrister and for the past 20 years I have been the editor of the Encyclopedia of Planning Law and Practice. I was also the Specialist Advisor to the Joint Parliamentary Select Committee that recommended the abolition of private bill procedure for works projects, and which led to the Transport and Works Act 1992.

  2.  This statement covers the Green Paper itself, and also the consultation papers on planning obligations and major infrastructure projects.

  3.  As to the Green Paper, it is remarkable how far-reaching are its proposals for reform. It challenges many of the implicit assumptions of the present system. It seeks efficiency and transparency. But it does not build upon volumes of supporting analysis, nor does it offer a detailed prescription for change, nor does it identify clearly the trade-offs it proposes to make between the currently vested interests to achieve its goals. The document sells an aspiration, and it tends more to rhetorical gusto than to intellectual depth. Much of the necessary detail is simply absent. The Government knows roughly where it wants to go, but it hasn't yet fashioned the route for getting there.

  4.  This is a worrying omission. British planning law is almost wholly procedural. The legislation has no statement of objectives or purpose. Its function is to allocate power and to establish procedural rights in decision-making. The substantive outcomes of planning are the product of the interaction, through a procedurally moderated process, of various competing interests. It is, as the House of Lords insisted in the Alconbury litigation, a politically-based and accountable process, but it is one in which the political realm is bounded by law. The 1947 reforms shifted the balance of power by subjecting developers' interests to State regulation, but it also established legal rules and institutions for the resolution of disputes.

  5.  There have been several social trends of the past 50 years which have moulded the present shape of the planning system. One is the changed relationship between citizens and the State. We live in a more pluralistic and less ideological society than that which fashioned the great planning reforms of 1947. People are better educated and more articulate. They are less willing to accept, as overriding imperatives, assertions of collective public interest expressed by elected representatives of national and local government. Another change is that in 1947 the predominant housing tenure was private or public rental; today it is owner-occupancy, giving people a major financial stake (often their sole capital investment) in decisions affecting land-use in their area. The scope of planning has also expanded; it has assumed new responsibilities in environmental protection and sustainable development. Unlike 1947, there is no differential tax on development value in land, so there are large sums at stake for landowners and developers. This factor is not overlooked in the rhetoric of objectors.

  6.  These trends have had a profound effect on both the ideology and the practical operation of the planning system. No longer can it be characterised, as it could be through until the 1960s, simply as a system of government regulation of private land-use in which neighbours and other third parties have no legitimate interest. A planning system will only find the public acceptance that it needs today if it allows properly for the expression of people's views. If that is to be more than a token exercise, it will take time. The questions that must be asked are: how much time, at what stage, through what process, with whose engagement, to what effect and with what accountability.

  7.  In the absence of any statutory definition of the purposes and objectives of planning, process is everything. Decision-making in planning is in part a political process, and in part a legal process. It is a political process in that it is vested in political institutions. But politics is not enough in itself. The law insists that, in taking planning decisions, proper account must be taken of all relevant policies and other material considerations, and that the prescribed procedures must be followed. So it is not just a matter of political choice. The process has also a character of adjudication: of listening to the arguments for and against a proposal, of weighing those arguments against the evidence, of identifying and applying the appropriate policies and of giving adequate and defensible reasons for decision. Not all interests are represented in this way, and Government policies have the function of representing the interests of those who have no realistic capacity to participate in the legal process, such as the homeless, and poorly housed and unemployed.

  8.  Against this background, the Green Paper seeks to speed-up planning processes. It proposes a fundamental departure from the existing dispute resolution mechanisms in plan making. It suggests that rights to appear at an inquiry or EIP into objections to proposed policies may be taken away, and replaced by a guarantee of participatory entitlements defined by a Statement of Community Involvement to be included in the Local Development Framework (paragraph 4.22). But it fails to spell out what this might mean, or the overall nature of the trade-off that is being proposed. This is between enhancing people's capacity for political participation, particularly by bringing the opportunity forward and promoting greater community involvement in the early stages of plan-making and project design; and removing or reducing rights of legal process in public local inquiries (paragraph 4.26).

  9.  When planning applications come forward, developers will have to complete a model checklist, including a statement of what consultation has been carried out in accordance with the Statement of Community Involvement (paragraph 5.8). There may be some further assistance for Planning Aid. The public may become entitled to address meetings of local planning committees, and they will have a statement of reasons for the granting of planning permission. But they will not have a right of appeal to the Minister. This suggests that the legally binding processes for public notification and consultation under existing legislation, for breach of which a decision may be struck down in an application for judicial review, would be supplemented by an informal code whose requirements would be no more than one material consideration amongst others in decision-making.

  10.  There are obvious attractions in attempting to bring public consultation forward in the process. Earlier public engagement can indeed reduce later conflict, through a better understanding of local interests and concerns, and through consensus-building. Yet even with extensive local consultation already in the preparation of plans, local plan inquiries have a tendency to run and run. Planning inspectors are, as they must be, meticulous in their observance of procedural fairness. Nonetheless, the continuance of these inquiries in their present form would make it impossible to achieve the regular updating of policies that the Green Paper proposes. Some policies are already out of date by the time they are finally approved. The best, in terms of process, has become the enemy of the good, in terms of useful outcomes.

  11.  However, since the Human Rights Act 1998, the Government is no longer a free agent in determining legal process. Whether it could abolish or limit participation in plan inquiries depends upon the extent to which Action Plans in practice would predetermine subsequent planning applications. There will be some aspects of APs, such as a reconfiguration of the Green Belt, or the adoption of tariffs for planning obligations, which could have significant impact on property value, and where a subsequent planning appeal would be unlikely to budge the policy presumption in the plan. The absence of any hearing at plan-adoption stage might therefore lead to a finding of non-compliance with Article 6 taken together with Article 1 of the First Protocol, of the European Convention. Another legal consideration for the Government in designing this system will be the forthcoming EU requirements for strategic environmental assessment.

  12.  But this does not mean that the current local plan inquiry process is sacrosanct. The process of examination in public (EIP), which was introduced in 1972 for structure plans in order to avoid long-running inquiries, provides a starting point. There is clearly scope for developing such a process further, to reflect the Green Paper's vision of a more iterative plan-making system through regularly reviewed Local Development Frameworks and Action Plans. No longer should participants and their representatives be striving towards the unattainable perfection of a stable long-life plan. If regular monitoring, review and updating were to become a realistic possibility, a more pragmatic approach would emerge.

  13.  On planning obligations, the process proposed by the consultation paper is not clearly spelt out. This is a document which advances headline ideas, rather than offers reasoned argument. The overall approach seems to be along the following lines:

    (1)  local planning authorities should no longer be bound by the "necessity" test of circular 1/97 (paragraph 2.3);

    (2)  tariffs should be broader in their purpose than simply to defray impacts (paragraph 2.3);

    (3)  tariffs should not therefore be calculated in a way comparable to a US-style impact fee (Annex B);

    (4)  their purpose should instead be to fund the sustainable development policies of the local planning authority, including: "housing, transport, regeneration, education, health, "liveability" and public open space, recreation and other community benefits" (paragraph 4.5); and

    (5)  hence schemes which already contribute to sustainable development in their own right might be exempt (paragraph 4.9).

  14.  The consultation paper is completely silent on the question of the criteria by which tariffs are to be set. They are not to reintroduce a system of land betterment taxation (Annex B), but local planning authorities will need to ensure that they "do not seek to impose an excessive tariff to choke off development" or to discourage the expansion of small businesses (paragraph 4.14). There is a general preference that local planning authorities should set their own tariffs with government guidance, ie, "advice on how they should approach the process, whilst still allowing a local decision on the level of obligations" (Annex B). The only other guidance on how a tariff might be set (paragraph 4.12) relates to multipliers, not to method.

  15.  So what are the substantive options? The main possibilities which are available to the Government seem to be:

    (1)  a tariff derived from rating out a capital budget, as with US-style impact fees;

    (2)  a tariff based upon some established measure(s) of need, as with current affordable housing methodology;

    (3)  a tariff based on what the market can bear: at its crudest this would be an ad hoc local facilities tax, set across a district's area in a manner which reflected the relative buoyancy of the local economy;

    (4)  a tariff based on uplift in development value of land: this would be, in effect, a capital value tax, set at a local rate;

    (5)  a tariff differentiated according to the price signals that the local planning authority wished to introduce to influence developers' behaviour.

  16.  Space constraints prevent a detailed explanation of each of these alternatives from being offered here (but see the January 2002 Monthly Bulletin of the Encyclopedia of Planning Law and Practice).

  17.  The consultation paper indicates that there would be a wide range of local discretion. There would, for example, be exemptions. There might be cases where the local authority "would not wish to pursue" a tariff because the scheme contributes to sustainable development in its own right (paragraph 4.9), suggesting that a local planning authority should be able to discriminate, both in setting tariffs (see paragraph 4.1) and on a case by case basis through negotiation, in favour of certain types of development, such as that being promoted by public sector bodies, including hospitals, schools and universities.

  18.  The requirements of equality and transparency tug in one direction: all development should pay the tariff at a standard rate. Unless a matching source of public funding can be identified, reduction in the liability of one developer must increase the liability of another. These considerations clearly underlie section 106 negotiations today, but they require a more explicit recognition in a tariff system. If there are to be reductions or waivers, it will be important to ensure that both the criteria and the machinery are spelt out in the tariff schedule and not left to case-by-case negotiation.

  19.  The ideas in the consultation paper are advanced at too elementary a level to allow proper analysis. Nonetheless, it is startling that there is no developed discussion of any process by which the tariffs are to be set. There will be a need to secure compliance with Convention rights. A taxation power that operates arbitrarily and in an unforeseeable way will clearly be challengeable under Article 1 of the First Protocol. The proposed shift from negotiation (under section 106 as it presently stands) to tariff involves a move from contract (to which Convention rights would not ordinarily apply) to taxation: a tariff is a unilateral requirement by the State; a negotiated agreement is signed voluntarily (a relative concept in this context) by the developer or landowner.

  20.  The mechanism that the consultation paper proposes for fixing tariffs is that of Supplementary Planning Guidance or, under the successor arrangements proposed in the Planning Green Paper, a Local Development Framework (which would set out the principles and the machinery: see paragraph 4.5), supplemented by local action plans or topic plans (see paragraph 4.11). For none of these proposals have any detailed procedures yet been spelt out for rights of consultation, participation, objection or hearing.

  21.  On major infrastructure projects, the new consultation paper builds on earlier proposals by the Government to introduce a stage of Parliamentary approval. It makes it clear that Parliament would be invited to do nothing less than approve the project (the principle of it, the need for it and its location) (paragraph 20). All that then would be left would be the "detailed issues of its implementation on the ground". In effect, Parliament would grant outline planning permission, with any subsequent public local inquiry limited to issues of detail. It would also provide confirmation in principle of any requisite compulsory purchase orders. National policy would thereby be imposed against local interests.

  22.  This goes much further than previous parliamentary engagement in the approval of major projects, such as Sellafield, Stansted and Sizewell, where the matter was not brought to Parliament until after the public inquiry stage, in order to add parliamentary legitimisation to a decision in principle by the Government in favour of the development proceeding. It goes further than the procedures by which new towns were designated, which included provision for public local inquiries.

  23.  The proposals differ also from current hybrid bill, private bill, and special parliamentary procedure, in that the rights of promoter and petitioners in those cases are prescribed by rules of both Houses, and provision is made for formal committee hearings. Such a process could only be reconciled with the Government's ambition for a 60-sittings-days turnaround if rights of audience were to be tightly contained.

  24.  There are important considerations also regarding environmental impact assessment. The consultation paper implicitly recognises that Parliament's decision would constitute the grant of development consent for the purposes of the EIA Directive, and that Parliament would therefore be the "competent authority" for these purposes; but it misuses the language of the Directive. The document submitted to Parliament would be an "environmental statement", not an "environmental impact assessment" as stated twice in paragraph 28. The environmental impact assessment is in fact the very process which will fall to Parliament to undertake. This would require Parliament to ensure, in accordance with Article 6 of Council Directive 85/337 (as amended by 97/11), that consultees are properly consulted, that the public concerned are given a reasonable time in order to express an opinion before consent is granted, and (Article 7) that other Members States affected by the proposal are, if they wish, also consulted. The results of consultations, and the information gathered, must be taken into consideration in the development consent procedure (Article 8).

  25.  These provisions suggest that, although EIA processes are more administrative than quasi-judicial, the UK Government will need to ensure that Parliamentary handling of such applications observes certain minimum obligations of procedural fairness. It would be difficult, for example, to reconcile the discipline of party political whipping of the parliamentary process with the requirements of the Directive for open-minded consideration of the EIA information.

  26.  Moreover, there will be a potential for challenge under the Human Rights Act 1998, not so much to the issues of the principle or the need for the proposed development, as to its proposed location. Where there was landowner opposition, Parliamentary approval would effect a compulsory acquisition of the land, such as would normally cause a public Bill to be treated as hybrid. To dispense with, or significantly curtail, a sufficient opportunity for a hearing, would not only run counter to a long-running Parliamentary convention, but also risk infringement of Convention rights. Yet, as Parliament decided when it enacted the Transport and Works Act 1992, there is only the most limited capacity within Parliament for dispute resolution regarding the location of major works.

  27.  This is not to say that there can be no role for Parliamentary involvement in the process. There could be no objection on these grounds to the Government's proposals for statements of national policy, and their Parliamentary endorsement. But to re-establish Parliament as a decision-maker rather than a policy-maker in planning disputes, is something that requires great caution.

April 2002

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