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Page 3, line 2, at end insert—
("( ) Any regulations made by the Secretary of State under the provisions of subsection (5) above shall provide for the application of a service level agreement governing the administration of a qualifying inquiry and the performance of any person appointed to hold it.").

The noble Lord said: We have had a number of debates both in another place and here on Second Reading about service level agreements. The effect of the amendment would be to write the concept of service level agreements between the planning inspectorate and local planning authorities onto the face of the Bill.

I have to tell Members of the Committee that local planning associations are concerned that, as the requirement for inquiries into development plans—which is a fairly new invention—is established in legislation, local planning authorities will be in the position of being required to use a service that is only offered by one agency for a function that they are statutorily required to fill. In those circumstances, they consider that it is essential that the level of service required from the inspectorate is formally set out together with some means of redress for the planning authority if the inspectorate fails to live up to those requirements. In a way, if I may put it this way, it is a form of local authorities' charter. I hope that those words find resonance with some Members of the Committee opposite.

The issue has been raised on a number of occasions and amendments have been produced and rejected which would have introduced a contractual relationship between the inspectorate and a local planning authority. Indeed, the Minister in another place said that the arrangements should not be written into legislation. Perhaps I may quote what he said:

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    should realise that that is why there are no targets and penalties for the planning inspectorate".—[Official Report, Commons, Standing Cttee E, 17/5/95; col. 19.]

That does not seem to live up to the Government's commitment to give value for money to everyone, including local planning authorities. I hope that Members of the Committee will appreciate that that is part of what I believe to be the Government's campaign.

As I understand it, the local authority associations have begun discussions with the department on the contents of a service level agreement and have reached the stage where a draft of such an agreement can be ratified. While we appreciate all that, we believe, nevertheless, that the principle for such an agreement should be on the face of the Bill. I beg to move.

Baroness Hamwee: I should like briefly to express my support for the amendment. When I was making inquiries about the matter before the Second Reading of the Bill, various comments were made to me along the lines of, "the inquiry went in a very leisurely manner and we didn't seem to make the best use of the time". Such comments came from local planning authorities which were frustrated that the inspectors were not, so to speak, observing best practice. It is that aspect to which the amendment is directed.

Before the Minister says it himself, I am sure that the noble Lord, Lord Williams of Elvel, would be perfectly happy to accept that regulations to be brought in by January (as we have heard) might not give adequate time for the matter to be discussed between all the parties. If the Government were, perhaps, to suggest a date by which they might make regulations dealing with the matter, I for one would be glad to hear it.

Earl Ferrers: I long to be helpful to the noble Lord, Lord Williams. When speaking to the last amendment he said that things had not been done quickly enough because everyone had been on holiday. All I can say is that the noble Lord seems to have indulged himself in work while on holiday by trying to think of amendments which he could table and which the Government are obliged to refuse. I think that the noble Lord should try to find somewhere more relaxing to go on holiday next year so that he does not keep providing us with such curious amendments.

Again, there is not a great deal between us on the matter. The only difference is whether it is essential to include in the Bill specific statutory regulations requiring a "service level agreement" to apply as a condition of charging for an inspector's services at a qualifying inquiry.

As the noble Lord implied—and I am sure that he does know—he is aware that officials of my department and those of the Planning Inspectorate Agency have been consulting officers of the local authority associations in recent months about a draft service level agreement. The consultation process which is now virtually complete—and that will please the noble Baroness, Lady Hamwee—has been most helpful. We are grateful to the associations for their attitude and approach to the matter. Provided that the associations

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ratify the agreement (and that is a particular quirk which applies to the associations in that they have to do so) it should begin to operate for inquiries which planning authorities ask the inspector to arrange from December onwards. I believe that that, too, will satisfy the noble Baroness.

I believe that our intentions on the matter are perfectly clear. We, too, want to see an effective service agreement in operation. Once it has been in operation for a reasonable period we will want to review how effectively it is working in consultation with the associations. I believe that that is the right way to do it and not to put it on the face of the statute. I am sure that this time, at least, I will have persuaded the noble Lord, Lord Williams, who is no doubt in an amenable mood having just returned from the Summer Recess. I hope, therefore, that he will agree not to press the amendment.

Lord Williams of Elvel: I am most grateful to the noble Earl. I certainly will take a more relaxing holiday next time than I did this time. I hope very much that on my relaxing holiday I shall not run into the noble Earl on the same beach and in the same place. But if I do I shall certainly make sure that on future occasions I do not spend my holidays, as the noble Earl seems to think, working on amendments that he cannot possibly accept.

Earl Ferrers: Perhaps I may just observe that that is a peculiarly unchivalrous remark. I had hoped the noble Lord would say that he would be delighted to have that experience.

Lord Williams of Elvel: We certainly enjoyed ourselves. I basically agree with what the noble Earl said; it is not entirely necessary to put this on the face of the Bill. However, I am glad to have the noble Earl's assurance that this matter is being worked on actively and will be dealt with and there will be no confusion about it. In the circumstances I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 1 agreed to.

Clause 2 [Validation, with retrospective effect, of certain requirements to pay, and certain payments made, in connection with past appointments]:

On Question, Whether Clause 2 shall stand part of the Bill?

Lord Williams of Mostyn: There are deep questions which we on this side believe arise out of the words in Clause 2. Perhaps I may touch on one or two of them. Clause 2(1) states:

    "This section applies in any case where, at any time before the passing of this Act, the Minister appointed any person to hold",

an inquiry. The words therefore are not limited in time or by any other form of description. If one goes further I suggest that one's doubts are reinforced. The words,

    "in any case where, at any time before",

refer as far back as the Town and Country Planning Act 1968 (that is, 27 years); the Town and Country Planning Act 1971 (24 years); and the Local Government Act 1985 (10 years). On a first reading of the words they seem to contain extraordinarily wide, unlimited powers. One is troubled, as my almost namesake the noble Lord, Lord Williams of Elvel, indicated, about this wide

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element of retrospection. I for one would be obliged if the Minister would indicate whether there should not be some limitation in point of time. What sort of sums are involved here? I do not refer to the per diem amount that was specified by the noble Earl earlier. What are the global sums involved? How many authorities are likely to be caught by this extraordinarily wide net?

Clause 2(13) relates to the repayment by local authorities to the Minister of sums actually paid over an indeterminate number of years. How many authorities are in that category? How much has been paid to these authorities from public funds? Ought there not to be some limit of time about demands for repayment of those sums so that local authorities, which have to be the custodians of public moneys, have a degree of certainty in the conduct of their fiscal arrangements? Ought there not to be some time limit specified for requesting payments as opposed to requesting repayments? I simply ask those questions because I believe as a matter of principle that they demonstrate that these wide powers ought to be the subject of careful scrutiny. Unless a reasoned and acceptable account is given by the Minister one will have great difficulty in doing other than opposing the Question that Clause 2 stand part of the Bill.

4.15 p.m.

Earl Ferrers: The noble Lord, Lord Williams of Mostyn, asks some pertinent questions and, if I may say so, he is quite right to do so because I believe that all of us dislike any form of retrospective action. I hope that I shall be able to persuade him why that is necessary in this case and that the provisions will not be as bad as he thinks. He is quite right to say that there is no time limit. There was the Town and Country Planning Act 1971 and, theoretically, this measure could have applied as far back as the Town and Country Planning Act 1968. However, that is not the case because there is a limitation period of six years. Even so, if this clause were removed, it would still be possible to go back to 1989. What we are talking about here is local authorities which have paid for inspectors' services and which have always done this over the years. Everyone knew that that was the accepted course of action and everyone was content with it. However, that is a point that has now been challenged. I shall discuss that later.

The noble Lord asked what was the total cost involved. The total repaid is £3 million to 100 planning authorities and the interest is £108,000 to 28 authorities. Those would be the sorts of sums which would have to be recovered. If this clause were removed, it would mean that there would be a total cost of £11 million. Perhaps I may explain why this is necessary, and I hope that I shall be able to satisfy the noble Lord, Lord Williams of Mostyn. We are doing no more here than validating—in other words, approving—what people had done when everyone thought that what they had done was correct; that is, when an inquiry is conducted the planning inspectorate provides an inspector and the local authority is charged for the services of the inspector. That is what is at issue; it is what everyone has done and what everyone accepted was a reasonable thing to do. This has been going on for the past 20 years.

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It is only now that the law is found to be not what everyone thought that it was, and with which everyone was content.

There are two main reasons why the Government consider that retrospective validation is justified in this instance. First, the provisions of Clause 2 impose no new financial burden on local planning authorities. These provisions simply validate past payments which all the local authorities concerned made in good faith, as did my department and everyone else, believing that they were sought and paid lawfully. As soon as doubts arose, the planning inspectorate stopped levying inquiry charges, but it also quite reasonably warned local authorities that in the event of legislation to validate the payments which had been made in the past, charges would be made for inquiry services which the inspectorate had provided during the interim period. Those are the figures of £3 million to planning authorities and the interest of £108,000 to 28 authorities which I gave the noble Lord earlier.

We have to have regard in this instance to the financial arrangements under which the Government and local authorities operate. In past years and in the present year general provision has been made in the annual local government finance settlement for the estimated sums which planning authorities might be expected to incur by way of charges for inspectors' services at development plan inquiries. This does not mean of course that the amount which has been allowed for each authority which is required to hold an inquiry can be specifically identified. However, it means that a sum has been included for the purpose of inquiries in a large group of local authority services which fall under the category of "all other services". Without the retrospective provisions these financial arrangements would have to be reviewed and the sums which had been allowed would have to be recovered by the Department of the Environment for the authorities in general. Frankly, that would be a bureaucratic nightmare and disproportionately expensive to administer.

Secondly, without retrospection the other charging provisions in the Bill would not be fair 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. It would be unfair in a number of ways. First, those local authorities which have paid but have not requested a refund would be unfairly treated in comparison with those which have obtained a refund. Secondly, those which have obtained a refund would be advantaged in comparison with those which, in the future, would be charged for what everyone believed up to now to be a proper and reasonable charge but which, if the clause were deleted, the former would not now have to pay. Thirdly, it is unfair to those local authorities which have not yet held an inquiry but will do so in the future and will be charged for that which the deletion of the clause would amend to be unchargeable in the past.

There is no good reason why planning authorities which have held planning inquiries in the past should now receive an unexpected windfall, which would be the case if the clause were to be removed. As the Government have provided funds to local authorities,

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which the noble Lord wishes to make a windfall, it would of course be incumbent on the Government to claim back the windfall.

To put the matter in a nutshell—which is always a dangerous thing to do with the noble Lord, Lord Williams of Mostyn—everyone thought that the position was such and such and local authorities were prepared to pay for inspections. They always did so. It was found that there was a loophole, which nobody had expected, and the retrospection is to close that loophole. Without the clause the position would be grossly unfair all round. I hope that the noble Lord is satisfied with that explanation.

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