Previous Section Back to Table of Contents Lords Hansard Home Page


Town and Country Planning (Costs of Inquiries etc.) Bill

5.5 p.m.

The Minister of State, Department of the Environment (Viscount Ullswater): My Lords, I beg to move that this Bill be now read a second time.

I am pleased to present to your Lordships' House what is inevitably a rather technical government Bill. The Bill is important because it seeks to remove the current source of uncertainty about who should pay for the services of a planning inspector who is appointed to hold an inquiry on the planning authority's behalf into objections to a development plan or some other similar plan. This applies in Wales and Scotland as well as England.

I should like to refer briefly to the history of the matter. Since the 1970s, when the first local plan inquiry was held under what was then the Town and Country

3 Jul 1995 : Column 970

Planning Act 1971, my department and local planning authorities assumed that it was lawful, on the basis of an implied contract, to impose a charge for making available the services of an inspector. That seemed entirely natural. The planning authorities were statutorily required, as they still are, to hold their development plan inquiry. All concerned therefore expected the authority to pay for the expense of that process, including the cost of an inspector whom the Secretary of State appoints independently of the authority.

Late in 1992 and the following year, Birmingham City Council queried the amount it was charged by the Planning Inspectorate Agency for the inspector appointed to hold the council's unitary development plan inquiry. Subsequently, the council also questioned whether any statutory power existed to levy those charges. To support its argument the council cited the judgment of the House of Lords in the case of McCarthy & Stone (Developments) Ltd. v. Richmond upon Thames London Borough Council. If I may attempt to summarise it, that judgment held that there is no power for a public body to levy a charge for its services in the absence of an express or implied statutory provision. Moreover, I am advised that even though the Planning Inspectorate Agency and the local planning authority normally agree on the terms on which an inspector is to be appointed for a development plan inquiry, there is no implied power to charge the authority for that service on any contractual basis.

When my right honourable friend the Secretary of State for the Environment and other colleagues were made aware of this legislative gap, the Government decided that the only reasonable course was to fill it as soon as parliamentary time could be made available. My noble friend Lord Arran announced, in a Written Answer on 21st February last year, the Government's intention to legislate on this issue in order to put the matter beyond doubt. I regret that we could not find an earlier opportunity to fulfil that intention.

Following that announcement, the Planning Inspectorate Agency's chief planning inspector informed all local planning authorities in February last year that the inspectorate would collect no further charges for development plan inquiries until the proposed legislation had been enacted. In the meantime, any local planning authority wishing to claim a repayment of its charge would receive it, but authorities were also advised to make full budgetary provision for the amounts which would be due to my right honourable friend's department if the proposed legislation were eventually enacted. Authorities who were naturally concerned about these matters thus received a proper explanation of what was involved and were reasonably advised not to expect the benefit of a "windfall" payment. Prudent authorities have followed that advice.

The sums at stake may not seem large in total local government public expenditure terms. The underlying principle is nonetheless important. In England and Wales, up to and including 1992-93, they amount to £4.5 million. For 1993-94, £1.4 million has been recovered from planning authorities and paid into a suspense account. A further £2.6 million is owing to

3 Jul 1995 : Column 971

my department. For the year 1994-95, approximately £3 million is due to the department. In future years, charges will amount to approximately £3.6 million on average while the present development plans workload continues. The department has repaid some £3 million to 100 local authorities together with interest payments of approximately £108,000 to 28 authorities.

The principle on which the Bill is based is that authorities should pay for the services which these charges represent and for which provision is made in the annual local government finance settlement. It is relevant at this point to mention the Royal Town Planning Institute's independent assessment of the Bill. In its observations, published on 11th January, the institute said:


    "The Institute has no fundamental objections to this Bill which essentially puts the law back to what it had been universally seen as being for 25 years until last year".

I turn now to the clauses in the Bill. Clause 1, applying in England and Wales, is the core provision of the Bill. The clause does two things. First, it enables the department to recover from planning authorities my right honourable friend's costs, through the Planning Inspectorate Agency, in appointing an inspector to hold what is called "a qualifying inquiry". These are inquiries into objections to local plans, or unitary development plans, or simplified planning zone schemes; to consider objections to such schemes; or to conduct an examination in public into structure plan proposals. Secondly, the clause enables my right honourable friend to provide by regulations the "standard daily amount" and the travel and subsistence allowances which planning authorities are to pay to persons, other than inspectors, who are appointed to conduct an examination in public into structure plans. My right honourable friend will lay the regulations in Parliament and bring them into force, subject to parliamentary process, as soon as practicable after Royal Assent to the Bill. The retrospective provisions of the Bill will validate the charges made up to the date of Royal Assent. Until regulations are brought into force, the provisions in subsection (2) of Clause 1, which refer to the amount being "determined and notified", will effectively continue to validate those charges until the regulations come into force. I appreciate that the provisions of Clause 1 may seem too lengthy and detailed. That is necessary to ensure that they do the job properly.

Clause 2, also applying in England and Wales, deals with retrospection. The Government are persuaded that, exceptionally, retrospection is justified on this occasion for two main reasons. First, Clause 2 imposes no new financial burden on local planning authorities. It simply validates past payments which authorities made in good faith, believing, as did the department, that they were sought and paid lawfully. In this context, I remind noble Lords that general provision was made in the annual local authority finance settlement for the estimated sums planning authorities expected to incur by way of charges for inspectors' services at development plan inquiries. Secondly, without retrospection, the other provisions in the Bill would be unfair to those planning authorities which, through no fault of their own, have not yet reached the stage of holding an inquiry as part of their development plan process. We see no reason why

3 Jul 1995 : Column 972

planning authorities which have already passed that stage should receive a "windfall" financial benefit through not including retrospective provisions in the Bill.

I shall briefly mention the comparable Scottish provisions in the Bill. I understand that the position has not been tested in the Scottish courts. In addition, planning authorities in Scotland have not so far pressed for repayment of the sums paid in the past. Nevertheless, because my right honourable friend the Secretary of State for Scotland thinks similar problems may arise he considers it prudent to legislate now in order to remove any doubt about the basis of charges made.

Clause 3 enables my right honourable friend to set charges by regulations. It establishes a firm statutory basis for payment by planning authorities in Scotland. This will apply in the case of both local plan and simplified planning zone inquiries. While this provides equivalent powers to Clause 1, there are a number of distinctive Scottish features. First, the reporters who hold local plan or simplified planning zone inquiries in Scotland are appointed not by the Secretary of State himself (as in England and Wales) but by the planning authority from a list provided by the Secretary of State. That list may include both full-time reporters and other suitably experienced people who are not officers of the Secretary of State. Secondly, examinations in public into structure plan proposals in Scotland are carried out on behalf of the Secretary of State; so the cost does not fall on the planning authority, as it does in England and Wales. Finally, the Scottish Office inquiry reporters' unit remains part of the Secretary of State's department and is not a Next Steps agency. Clause 3 reflects these distinctive elements but with the same underlying objective and effect as Clause 1 for England and Wales.

Clause 4 makes retrospective provision with regard to local plan inquiries, held under the Town and Country Planning (Scotland) Acts of 1969 and 1972. There have been no simplified planning zone inquiries in Scotland yet.

As in England and Wales, neither of these clauses imposes any new burden on Scottish planning authorities. They are intended to put on a firm statutory footing the charging arrangements which have operated in practice for a number of years.

In conclusion, this short Bill provides formal charging powers which everybody had assumed existed for some 20 years. Today we are concerned with the principle of the Bill. The Government consider that the Bill is soundly based on the principle that it is reasonable for the user of a public service to pay for it—including, in this case, an essential provision for retrospective payment. I commend the Bill to the House.

Moved, That the Bill be now read a second time.—(Viscount Ullswater.)

5.17 p.m.

Lord Williams of Elvel: My Lords, the House will be grateful to the noble Viscount for introducing what he rightly says is a short Bill. It is, nevertheless, an important Bill, as I am sure he recognises. I do not intend to move the amendment that I have tabled, not

3 Jul 1995 : Column 973

least because I tabled it at a very late stage and I do not think I gave the House sufficient notice. But the fundamental issues contained in the amendment are ones with which we shall have to deal when the Bill reaches Committee.

The noble Viscount quite rightly said that there was a problem which the Government had to meet. With Clauses 1, 3 and 5 of the Bill—looking at the future—there seems to be no particular problem. We shall discuss in Committee whether the measures the Government are replacing are right or wrong, whether indeed local authorities should pay the planning inspectorate for the costs of inquiries when those are imposed by statute, whether local authorities should be invited to sign a blank cheque, which is effectively what it is, without any appropriate agreement between themselves and the planning inspectorate on costs, and so on. We shall pursue a number of detailed points in Committee.

Had the Bill stopped there I do not think that there would be any point of major principle between us. There would be points of detail. But in Clauses 2 and 4 the Government have introduced retrospective legislation. The noble Viscount is quite right to say that the matter has not been tested in the Scottish courts and that therefore there has been no repayment. He was right in saying that under the Town and Country Planning Act 1971 development plan inquiries were mandatory and charges were levied, and have been levied since then. They were levied for approximately 21 years.

This arrangement was challenged by Birmingham City Council in 1992 on the ground that the Government had no authority from Parliament to levy those charges. Birmingham City Council won the case. It was clear to the court that an implied contract did not constitute proper authority for the Government to levy charges on local authorities in this respect. As the noble Viscount went on to say, the Government decided that they would have to rectify the position. In the meantime, the money that had been paid by local authorities to government over those 21 years, was repaid. I have a figure of 97 local authorities. I believe that the noble Viscount said that there were 102, but the matter is not of great significance.

The money was paid back to local authorities with interest on the grounds that it had been levied by government ultra vires. Since 1992 charges have either not been paid because local authorities realised that the court had decided that the Government were acting ultra vires in levying such charges, and such charges as were paid have been put into a suspense account pending the matter being cleared up in one way or another.

As the noble Viscount quite rightly said, it is a question of transferring from one public pocket to another in the sense that, as long as one eliminates the council tax element of local authority revenue, it is the revenue support grant that supplies the bulk of local authority revenues. So if the Exchequer gives to local authorities with one hand it can take away with the other.

3 Jul 1995 : Column 974

But it seems that the reasons for retrospection—and here I rely on the opinion of noble friends who are more expert than I am in constitutional law—are not very convincing. First, the fact that there is no new financial burden on local planning authorities does not seem to me to be a reason at all, but the fact of the matter. Obviously, if there were a new financial burden—and we shall discuss that later on—then clearly the retrospective element would be intolerable.

Secondly, the noble Viscount gave as the next excuse that the law now is where it was thought to be. I am advised, again by my noble friends who are more expert than I am, that that is a matter which is not necessarily justification for retrospection. Thirdly, the noble Viscount said that it would be unfair since those authorities who have yet to have their development plans approved by statutory inquiries, or tested by a planning inquiry, would be disadvantaged if Clause 1 is accepted and Clause 2 not accepted. Again, my noble friends say that that is often tried on—that is, unfairness—but the law is neutral in these matters.

Therefore, unless the Government come up with some better answers, we shall have to have a serious debate in Committee on this matter. Furthermore, I am advised that the authorities which have commented on retrospective legislation regard it as being the special responsibility of the law officers of the Crown. The public at large quite rightly view retrospective legislation as undesirable. There is the matter of whether the law officers of the Crown have looked at this Bill and seen it to be expedient in one form or another; and if so, why?

The reason why I ask these things is evident. Any form of retrospective legislation sets a precedent for future forms of such legislation. Let us suppose that instead of local authorities, which the Government can hammer as they wish, the victims were private sector companies. Can we seriously imagine that the Government would produce legislation validating charges that had been levied on private sector companies over 21 years, before a company had the nous to take them to court and say that they had no vires to do so? Can we seriously imagine that such a Bill would be presented to your Lordships?

Then we come to precedent. What would happen if the same principle were to be applied to individuals, with payments levied over 21 years which we are then told are illegal? Can we seriously imagine that the Government would introduce retrospective legislation to correct that matter? What would happen if local authorities themselves made mistakes in charging for their services? Are we to assume that the precedent which the noble Viscount has introduced of no financial burden, etcetera, and that the law was what it was thought to be, will allow local authorities to ask for legislation to correct the mistake they had made in being ultra vires in levying charges?

I ask all these questions because your Lordships are particularly sensitive to retrospective legislation and all that that implies. The noble Viscount will know that my right honourable and honourable friends in another place did not oppose the Second Reading of this Bill on the grounds that they would have a satisfactory explanation

3 Jul 1995 : Column 975

of the retrospection at the Committee stage of the Bill. That did not happen and my right honourable and honourable friends voted against the Bill at Third Reading precisely on the grounds that they had not received a satisfactory explanation. The explanation which the noble Viscount has given is exactly the same as that given by the Minister in the other place. We shall have the same view as my right honourable and honourable friends in the other place when we come to it.

So my thesis is that we need much more information from the Government on why such retrospection is necessary. What are the precedents? Have the law officers of the Crown given their judgment on this? Have they put their names to any form of memorandum, opinion or approval that, on the face of it, this is a desirable principle to introduce into legislation? We must bear in mind that any precedents which are set by this Bill, however small the Bill, may be relevant to those matters which might arise in the future. I very much hope that the Government will pay attention to what I am saying and before we reach the Committee stage produce a report of some sort to the House which answers my questions.

5.27 p.m.

Baroness Hamwee: My Lords, the retrospective nature of the Bill is its most obvious attribute. When I read it I was struck by another word; namely, "reciprocity". The noble Viscount, Lord Ullswater, has told the House of the background to this Bill. It is a background with which I was personally involved—that is to say, the issue of charging by local authorities for giving planning advice to prospective developers.

Perhaps I may take a moment or two of your Lordships' time to explain that background because I believe that it is relevant to my objections to this Bill. It seemed to my authority, Richmond upon Thames, at a time when I chaired the planning committee, that it was not appropriate for prospective developers of large developments—I do not mean people considering small, rear extensions to residential premises—to receive free advice at the expense of local taxpayers; in other words, when they sought advice from the planning authority on what might be acceptable, the cost of the advice should be recovered. It is not a question of gaining a profit but simply of ensuring that developers, who, after all, stand to gain very considerably, should not be a charge to the local taxpayer. That seemed to be reasonably well accepted by many developers. That was welcome and we discussed their ideas with the planners until McCarthy & Stone challenged the arrangements. Therefore, your Lordships will understand that I feel particularly sore that, having identified a gap which, as the Minister said, should be filled, the only gap that the Government saw fit to fill was the lack of power on the part of central government not providing the power for local government.

I have been led to believe that the Department of the Environment is not unsympathetic to the attempts made by my authority, which are being looked at with interest by other authorities. After all, in these tough days a certain market approach is generally appreciated by

3 Jul 1995 : Column 976

central government. As I said, I am sore—perhaps my feeling goes a little further up the spectrum towards incensed—that only one gap has been filled by the Bill.

There is another inconsistency in the approach taken in the Bill. I refer to the cost of the development plan and similar inquiries. As the House will be aware, we work now in a plan-led system where the most material consideration—I do not use the term in an entirely technical sense—is the development plan. That is the context in which planning applications are considered. I applaud that approach. However, it has meant that there are longer, more detailed inquiries at the development plan stage. It is now more important to landowners and to prospective developers to investigate fully the constraints that there might be on the development of major sites and to ensure, as far as they can, that the plan, having gone through the inquiry stage and eventually been adopted, provides the most favourable situation for their future applications. That has inevitably affected the length of inquiries and the work that is involved. That is not necessarily a bad thing, but it means that the development plan inquiry is to some extent taking the place of an appeal against a refusal of a planning application under the old system.

The inconsistency seems to be this. As I understand it, on an appeal against a refusal of planning permission, the costs of the inspector are borne by the Government. If that is so, it seems that there is an argument which we should certainly explore as to whether the costs of the development plan inquiry should similarly be borne by the Government. I should add that there is a widespread view that in paying for the inspector, local planning authorities are paying the piper without being able to call the tune. By "tune" I do not mean the outcome of the inquiry, but comments have been made to me about the way in which inquiries are conducted, such as, "It went at a leisurely pace", and, "It was not a productive use of time". It is understandable that local authorities, having to pay the bill if time is not used productively, will comment to that effect.

Before the debate I inquired about how the matter is dealt with in standard spending assessment terms. I was told that the cost of inquiries comes in the "other services" block. I would not attempt to identify that. I am glad to know that it is there, but one has to take it on trust. Perhaps the Minister will be able to tell the House how within that block the figure can be assessed, given that there will be such expenses in some years but not in others. As the Minister knows, one of the complaints made by local authorities is about the difficulty of budgeting for inquiries.

As I have suggested, we need to address the relationship between local authorities and the inspectorate. If the inspectorate is to act more like a private sector organisation—I believe that that is what the Government want—the relationship between the inspectorate and the authority needs to be clear and even-handed.

I have another question for the Minister. I apologise for not having given him notice of it, but I should be grateful if he could confirm either today or later what will be covered by the costs. I assume that by "the costs of the inquiry", we are to understand that it is not only

3 Jul 1995 : Column 977

the costs of the inspector's time that will be covered but also the costs of the programme officer and the ancillary costs such as the reporting at a later stage.

I return to the major issue, the retrospective nature of the Bill. I entirely agree with the noble Lord, Lord Williams of Elvel, that the Government have to make their case convincingly in suggesting that your Lordships should agree to retrospective legislation. I say that with a little less passion than would be the case if the Bill were not putting everyone into the position in which they thought they were in. However, the propriety of what is being done must be scrutinised if for no other reason than the precedent which the noble Lord suggested. As one of their reasons, the Government said that it would be unfair on authorities which had not yet reached the inquiry stage if they had to pay while other authorities did not. There is a simple—I hope not too simplistic—response to that: if each authority were given one "free" inquiry, there would be no unfairness towards those which came later in the process.

On the question of precedent, the noble Lord asked about the position of a local authority that had been found to have made a mistake and whether the Government would agree to retrospective legislation to put right that local authority's position. As I have suggested, this Bill could have been an opportunity to allow for that. The Minister knows my views on the need for local authorities to have wider powers than they do and to have a power of general competence, which would not mean that each action taken by a local authority was scrutinised as to its vires. However, given that the Government have identified that gap and decided to fill it, I am sad that they have not filled it completely.

5.36 p.m.

Lord Ewing of Kirkford: My Lords, although my name is not down to speak in this Second Reading debate, perhaps I may ask the Minister a simple question. When he dealt with the Scottish aspects of the Bill, the Minister was kind enough to say that no money had been returned to any Scottish local authority and that no Scottish local authority had challenged in a Scottish court the right to collect that money. That being so, can the Minister explain why it is necessary to introduce retrospective legislation in relation to a situation in Scotland which simply has not arisen?

It seems to me that the Government are obsessed with the retrospective aspect of the Bill to such an extent that they are introducing retrospective legislation even where it is totally unnecessary. No money has been returned to Scottish local authorities and the position has not been challenged in the Scottish courts. Therefore, it seems absolutely unnecessary to extend the retrospective aspect of the Bill to Scotland. It would make far more sense in legislative terms to introduce a measure to regularise the matter from the date on which the Bill becomes an Act. We certainly do not need the introduction of retrospective legislation for a situation which, on the Minister's own admission, has simply not arisen.

3 Jul 1995 : Column 978

5.38 p.m.

Viscount Ullswater: My Lords, I am grateful to the noble Lord, Lord Williams of Elvel, for saying that he will not be moving his amendment this evening. Perhaps I should start by reminding noble Lords that my noble friend Lord Arran announced to your Lordships' House as long ago as 21st February last year in a Written Answer the Government's intention to introduce this Bill. My noble friend's Written Answer explained that the proposed legislation would be retrospective in order to validate payments already made and to secure fair treatment for all planning authorities irrespective of the timing of their individual local plan inquiry. That statement made the Government's intention plain. The noble Lord, Lord Williams, has not raised the issue until this moment—


Next Section Back to Table of Contents Lords Hansard Home Page