Localism Bill

Memorandum submitted by CBI (L 29)

1. The CBI is the UK's leading business organisation, speaking for some 240,000 businesses that together employ around a third of the private sector workforce. With offices across the UK as well as representation in Brussels, Washington, Beijing and Delhi the CBI communicates the British business voice around the world.

2. The CBI supports the principle of devolving greater power to local communities as set out in the Localism Bill. However, the proposed reforms must not compromise the private sector’s ability to deliver the growth needed to drive economic recovery and create jobs.

3. The CBI supports the government’s recognition that the UK needs approximately £200 billion of infrastructure investment over the next five years to underpin economic recovery, and that much of this investment must come from the private sector.

4. Investor confidence in infrastructure relies upon an effective planning system that delivers timely decisions and certainty. We will judge the Localism Bill’s proposed reforms on these criteria.

5. The rest of this submission sets out the CBI’s priorities for the Localism Bill. These are:

· Changes to the fast-track process for nationally significant infrastructure projects (NSIPs) should ensure timely decisions and provide certainty

· Provisions should be made to secure strategic planning at a sub-national level in the new planning system – strengthening the ‘duty to cooperate’ clause could offer a solution

· The Localism Bill must maintain the right balance between significant local level public consultation for planning applications and a timely decision making process

· The relationship between the Community Infrastructure Levy (CIL) and section 106 agreements must be clarified in order to provide clarity and certainty.

Changes to the fast-track process for nationally significant infrastructure projects (NSIPs) should ensure timely decisions and provide certainty

6. The CBI understands why the government wants to reintroduce ministerial sign off to the major infrastructure planning system. The time limit of three months for sign off is vital and must be maintained to sustain business confidence that decisions will be made in a timely manner.

7. The Infrastructure Planning Commission (IPC) already has 50 major projects on its books, including energy projects amounting to the equivalent of two-thirds of the UK’s current total energy capacity. On top of this, the pre IPC section 36 of the 1989 Electricity Act still has 37 projects to process (inherited from the previous government). Given that the Infrastructure Planning Commission is still in its fledgling period, we urge caution when making any changes that could undermine business and investor confidence.

Provisions should be made to secure strategic planning at a sub-national level in the new planning system – strengthening the ‘duty to cooperate’ clause could offer a solution

8. Clause 89 introduces legislation to abolish regional strategies. The CBI understands that in some areas regional strategies did not deliver all that was hoped. However, they were successful in identifying the sub-national infrastructure needs for an area, including energy supply and waste management, both of which are crucial to a well functioning economy. We have concerns that handing this down to local authority level could lead to duplication of resources and a lack of strategic thinking, leading to fragmented infrastructure.

9. We welcome the ‘duty to cooperate’, (clause 90) which requires constructive, active and ongoing engagement between local planning authorities and other prescribed bodies. However, we propose that this clause be tightened to more clearly set out how the duty to cooperate will work in practice and be enforced. Strengthening the duty will ensure that there is joined up thinking on crucial issues such as waste management.

10. The CBI recommends that the duty to cooperate explicitly stipulates the issues to which the duty applies, and the minimum geographical level that cooperation must take place at, to ensure that crucial issues of sustainable development can be dealt with at the most appropriate geographical level. A duty to have regard to the National Planning Policy Framework in discussions between local authorities could ensure that sustainable development priorities are recognised.

The Localism Bill must maintain the right balance between significant local level public consultation for planning applications and a timely decision making process.

11. Business calls for assurance that increased community powers will not lead to blocking the development of infrastructure. The CBI urges clarification that proposed safeguards to promote the benefits of development to local communities, including in the context of ‘neighbourhood planning’, will be sufficiently robust and enforced, to attract the private sector investment needed to upgrade and deliver the UK’s infrastructure needs.

The relationship between the Community Infrastructure Levy (CIL) and section 106 agreements must be clarified in order to provide clarity and certainty

12. CBI welcomes the new model of CIL, which recognises the need to maintain existing infrastructure as well as building new infrastructure, and looks to incentivise development in communities by redirecting part of the funds to those neighbourhoods accepting development. However, concerns remain that the relationship between CIL and section 106 agreements has not been adequately clarified. Clarifying this relationship would reassure business over the possibility of double charging, and in doing so provide the certainty required to inspire investor confidence.

January 2011