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Lord Hanningfield: I do not believe the Minister has understood the point made by several noble Lords. He refers all the time to the development. Obviously, the clause does not apply just to a development but to the areas adjacent to it. Even with a small district council the access to some of it can be much easier—for example, the availability of a school. In an urban area there would have to be different requirements because it is not just the question of a particular development which the Minister is always talking about. Developments are never in one space: they have roads to them, schools, hospitals and everything else. Therefore, Section 106 negotiations now often take account of all those considerations relating to adjacent areas, not just the particular development. The Minister constantly said "a development".

Lord Rooker: I fully accept that using the best practice we have now under Section 106 will enable us to write the new guidance and best practice. For example, in some areas there is a generalised formula: such and such a number of new dwellings equals the need for a primary school—I am aware of the figure but I shall not give it off the top of my head; such and such a number of new dwellings requires a secondary school which may or may not be on that development and can be used by it and requires access to it. I fully

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accept that point but it cannot be achieved out of thin air. There is already a wealth of evidence from good Section 106 practice which will help us to write the guidelines and the regulations.

I have a note on the consistency point, which is not unimportant. The charging and obligation policies will have to be developed within the framework of central government policy and guidance using best practice. We have already mentioned that guidance will ensure consistency of policies, including methodologies and formulae. We need consistency on that, but I suspect that they do not have to be exactly the same in every authority. The guidance will build on existing best practice. It is not as though we have had no experience of the effect of planning obligations—for example the requirement for health centres, education, access roads, bridges or whatever is a result of "x", "y" or "z" development, be it mixed, dwellings or industrial. We have experience of that around the country and will use that to write the guidance and be consistent across the policies.

Lord Best: I shall offer one or two thoughts that I would have shared with your Lordships in the clause stand part debate. I shall throw them into the pot now, because they relate to the practical problems of moving from the site by site negotiation of Section 106 agreements to pre-determined planning charges, contributions or tariffs. I echo a number of points made by noble Lords.

My own housing association in York, the Joseph Rowntree Housing Trust, has been engaged in a number of developments in recent years. I have discovered that the circumstances of each site are unique. One brownfield site was an old refuse tip leaking methane gas, where we had to undertake expensive decontamination work. One large greenfield site has huge pylons and power lines that need to be buried underground. Special measures will be needed on another site to protect against flooding. We may find the expensive consequences of discovering archaeological remains under one site, while there may be requirements to remove some protected species like the greater crested newt on another site. A development on one site could bring new viability to a school with falling numbers, but another development will have to be properly charged for the extra education costs flowing from the arrival of more children where there are no available school places.

In one part of any town gentrification of a neighbourhood that needs renewal would suggest a low tariff to attract development. In another part, perhaps close by, a developer will be able to sell for high prices and the local authority will have the chance to go for a higher tariff. The scale of a development will make a major difference, as will its density. There are also variations in the subsidy arrangements for affordable housing which face the developer and any partner housing association. Those financial arrangements will also vary from site to site. In one case the Housing Corporation will be able to offer social housing grant worth several thousands of pounds per house so the housing association can pay

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the developer something approaching the market price for each affordable home. But in another case no more funds may be available as grants from the Housing Corporation. If the development is to incorporate affordable housing, the developer will need to put in some serious money. In that case it is not realistic to expect as many affordable homes as could be supplied if plenty of public money was available.

Each case is different and a negotiation, not a fixed charge or tariff, either in case or percentage terms, will be necessary to achieve outcomes that are acceptable to all. In York, the headline aspirational target of the council is for 50 per cent of affordable housing to meet its pressing needs. But it has to accept lower figures of half, or less than half, where the constraints on the developer make it impossible to achieve such a high quota. No fixed tariff could cover all those circumstances. If an authority goes down that route there could be long delays in trying to calculate the level of tariffs, as has been suggested. Once those levels are announced they are likely to lead to disagreements, appeals, calls for judicial reviews or further delays because one size may not fit more than one site.

The Minister suggested that developers could simply reject the offer of the alternative system of tariffs and choose to stay with the current Section 106 negotiations—thereby having nothing to do with the new system. But the developer will worry that once the local authority has set up its system of tariffs it will be under some pressure to accept them. They will fear that once the tariff system is set up, developers who reject it will find that all the current problems facing Section 106 agreements—I shall argue later that there are many ways to improve them—are not likely to be cured. Current delays include there being no skilled planners able to negotiate at a sophisticated level, a lack of co-ordination between relevant public bodies, and the lack of a mediator or arbitrator to help the processes. The problems facing Section 106 agreements may still be there and may be worse if the local authority chooses a system of tariffs instead—and developers will feel under some pressure to accept them.

I suggest that it is not likely that we would be able to find the ways in which tariffs could be applied to anything more than a single site at a time. If you have a tariff which you apply to only one site at a time, you do not have a tariff, you have a negotiation site by site. If we are to have a negotiation, let us improve the Section 106 agreements that do just that—negotiate site by site. There is good mileage in that.

Baroness Hamwee: I was going to ask this question on clause stand part but given the way this debate is going, perhaps I can ask it now. It is a short question. Why have the Government left in the repeals schedule the possibility of repealing Section 106 in view of the alternatives that are being described?

Lord Lucas: I entirely support what the noble Lord, Lord Best, has said, but surely under these circumstances a local authority will set a high tariff. There is no way that a local planning authority wants

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to miss out on the planning contribution that it can get from the best sites in its area. Therefore, on all the lesser sites it will negotiate a lower tariff. It will go straight back into negotiation again.

The idea in Clauses 46 to 48 is wonderful. It is done with the best of intentions but the closer you look, the more you can see that it does not work.

Lord Rooker: If it does not work, people will not use it. I know that that is a glib answer and is not satisfactory on the very important, practical points made by the noble Lord, Lord Best. I fully accept that all his examples need a proper answer. Given the way he put them, it is very difficult to see what the answer would be, so we are led down the negotiated route.

On the concern expressed by the noble Baroness, Lady Hamwee, I do not know the precise answer. However, I said earlier this evening in relation to this issue that we are creating an alternative to Section 106, not a replacement, but it will require the wholesale rewriting of Section 106 in regulations. That is why I suspect that the point about the repeals schedule is there. But if that is not the case, I will find the noble Baroness a proper answer.

Baroness Hanham: I thank everybody for their contribution. I am sure that the Minister will read carefully what the noble Lord, Lord Best, said, in particular, because he has wide experience of having to deal with Section 106 and the pitfalls that we all recognise in trying to develop the criteria in the development plan documents for this new tariff system.

Thanks to the Library, my extensive efforts, and being slightly late back, I now have the results of the consultation that the Minister published. It would have been enormously helpful had we had it before. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Bassam of Brighton: I think this is an appropriate moment to break. I suggest that we do not return to the Committee stage before 8.35 p.m. I beg to move that the House do now resume.

Moved accordingly, and, on Question, Motion agreed to.

House resumed.

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