Local Democracy, Economic Development and Construction Bill [HL]

My Lords, this is an important set of amendments. I am grateful for the opportunity presented by the noble Baroness to address some issues raised by them. The amendments are detailed and, as she said, intended to strengthen the requirement for regional strategy to be based on sustainable development principles. I will start by reassuring the noble Baroness about the way in which sustainability is embedded in the Bill and in the policy. I will come to Clause 80 at the end of my speaking note: that is the logical sequence. The integrated regional strategies that we are creating are underpinned by the strong commitment to sustainable development that runs through our planning policies and that is fundamental to the way in which we develop our ability to survive and grow as a nation and an economy. I am pleased to say that we are acknowledged world leaders in our response to the mitigation of climate change. Sustainable growth cannot be achieved unless it is within regional environmental limits. We have been absolutely clear about this in our definition of sustainable economic growth, both in the Bill and in the policy document that accompanies it. Clause 80 makes clear our commitment to sustainable development, which is also in the Planning and Compulsory Purchase Act 2004 and the Planning Act 2008. I completely understand the intentions and aspirations of the noble Baroness, and of environmental stakeholders such as Natural England. However, it is important to be clear, first, that the Bill must be read in the round. Individual clauses cannot be applied in isolation. Secondly, there are several further safeguards to ensure that sustainability plays a key role in shaping the new regional strategies. I will run through the clauses briefly. Clause 67 makes it clear that regional strategies must set out policies on sustainable economic growth, development and land use, and must include policies designed to contribute to climate change mitigation and adaptation. Clause 73(2) makes it clear that regional strategies are required also to undergo a sustainability appraisal and a strategic environmental assessment under the Environmental Assessment of Plans and Programmes Regulations 2004. Clause 71 makes it clear that the process for preparing regional strategies also requires full community involvement, including from statutory consultees such as Natural England and the Environment Agency, which will use their scrutiny and expertise to ensure that the strategy takes full account of all sustainability considerations. Clause 72 ensures that strategies will have to be tested by an independent panel which, in the course of its examination, will take account of the sustainability appraisal and the strategic environmental assessment, as well as of all the representations from stakeholders including NGOs. Clause 73 requires that, in preparing their strategies, responsible regional authorities will need to have regard to national policy and guidance. This means having full regard to the principles set out in the cornerstone of the planning system—PPS1 on delivering sustainable development and its climate change supplement—and applying the policies in other planning policy statements and guidance. There are further checks about how sustainable regional strategies are because under Clause 77 responsible regional authorities must prepare and publish a report on the implementation of the strategy. That will include an assessment of how well other bodies that work within the context of the regional strategies, including EPBs, are delivering on the commitments they contain, including commitments on sustainable development. It is significant that we are also starting work on a national core sustainability framework, which we announced in our SNR consultation document last year. When finalised, this framework will replace the existing separate sustainable development framework documents for each region and will be a key yardstick against which all regional strategies can be appraised. Therefore, we have a clear set of provisions that ensure that sustainability is fully embedded in the Bill and in the policies that will follow. I turn to the specific amendments. Amendment 157C seeks to remove the reference to "growth" and to replace it with the words "development and regeneration". My difficulty with this is that the word "growth" is there for a purpose, not to indicate an overriding imperative for growth at all costs, but because our regions must work towards stronger regional economies based on skills, jobs, investment, innovation and enterprise, which all underpin sustainable economic growth. At a time of serious challenges to our economy and growing unemployment, I would be very reluctant to indicate in any way that jobs are a secondary issue. Removing the word "growth" changes the focus of regional strategies, including the requirement to deliver the regional economic performance PSA that challenges regions to increase their prosperity and enhance their competitiveness. We must ensure that regional strategies secure the right outcome for future generations. Shying away from the economic outcomes of the strategy is not the way to do this. It can be done only within the context of sustainable development because, as I said in Committee several times, I believe that the two are interdependent. I know that the noble Baroness is very serious about Amendment 165A, which would require the RDAs, as a key purpose, to further sustainable economic development instead of economic development. I really do understand the concerns here, but let me reassure the noble Baroness that Section 4(1)(e) already gives the RDAs a duty to contribute to the achievement of sustainable development alongside their economic development duty. The Bill provides for the RDAs to exercise their functions in relation to the regional strategy for the region with the objective of contributing to sustainable development—that is under Clause 80—and requires regional strategies to have policies in relation to sustainable economic growth—under Clause 67—so the safeguards are there. As the noble Baroness said, the amendment also removes the words, ""where it is relevant to its area to do so"," in Section 4(1)(e) of the RDA Act. As she said, that would increase the scope of an RDA’s sustainable development purpose so that the purpose would be to contribute to sustainable development everywhere else in the UK as well as in its own area. This issue has been well debated by both Houses on several occasions. I understand the noble Baroness’s argument, which she made very powerfully, but if we remove from the RDA legislation the phrase, ""where it is relevant to its area to do so"," each RDA would have a duty to take actions contributing to sustainable development that is not relevant to its area. That makes its purpose and focus less credible and realistic. The qualification enables sustainable development to be relevant to a RDA area, but not restricted geographically to it. That is the best legal balance to capture what we want the RDAs to do. It is a difficult balance, but the appropriate one. It would not be sensible for RDAs to spend time and money on activities that might arguably contribute to sustainable development across the UK, but might have no relevance to the region. Amendment 157F seeks the introduction of further wording into Clause 67(4) to ensure that the policies prepared under subsections (2)(a) and (b) are consistent. The noble Baroness made a strong case about the logic of consistency. For reasons I have set out, I feel that the argument is partly made because the Bill achieves that. Any strategy which has inconsistent policies is not going to be sound. We have an independent examination of strategies to test for soundness. Internal consistency is an essential requirement and we can safely leave it to a panel of inspectors to test for soundness and consistency against the criteria contained in the guidance. We also debated Amendment 157D in Committee. That would expressly require regional strategies to have policies concerning the protection and enhancement of the environment and social welfare of the region. Clause 71 already requires responsible regional authorities—the RDA and the leaders’ board—to have regard to national policy when preparing a regional strategy and to guidance issued by the Secretary of State. Given that the Secretary of State has published policy on the need for plans to protect the environment and promote sustainable communities, this amendment would not have much practical effect. I understand the concern to promote sustainable development and protection of the environment. They are fundamental to our policies on plan-making and development management. We have been explicit that they form part of our expectation of the outcome of the strategy because the published definition of sustainable economic growth is growth that can be sustained and is within environmental limits but also enhances the environment and social welfare. They certainly form part of our policy expectations in relation to the development and use of land and policies designed to contribute to the mitigation or adaptation of climate change. Amendment 164K seeks the introduction of a new paragraph under Clause 77(3), requiring the regional strategy monitoring report to demonstrate how the implementation plan will deliver sustainable growth by using a full set of indicators. It is not the purpose of the monitoring report to demonstrate how the implementation plan delivers the strategy. That is the role of the implementation plan itself under Clause 77(1), which, as we have said, focuses on how the outcomes will be achieved and how the strategy will be implemented. The purpose of the report is to provide an annual update on how effective the regional strategy has been in delivering its vision. It is the role of the sustainability appraisal report under Clause 73(2) to test how sustainable the strategy is. I can reassure noble Lords that we intend to take forward, and if necessary develop further, the core set of output indicators which we published in revised form in July 2008. They provide clarity on what regional spatial strategies should report on in their annual monitoring reports. I recognise the concern raised in Committee by the noble Lord, Lord Greaves, that the new regional arrangements will skew the focus of local development frameworks and local planning decision-making towards economic growth outcomes at the cost of sustainable development. The noble Baroness referred to her anxiety in general, so it is right that I should provide assurance on that point. Local Authorities remain local planning authorities. They will not lose their planning powers; they will not be faced with a change in either the principles which underpin the system or their responsibilities under this Bill. They will continue to be subject to legal requirements regarding sustainable development, sustainability appraisal and, like regional strategies, they will need to have regard to national policy in preparing their policies and when making planning decisions. Local plans will still need to be in general conformity with regional strategies, and that will be for the planning inspectorate—those expert independent adjudicators—to determine and not for the responsible regional authorities. Having gone through that in some detail, I hope I have provided some assurance. My pièce de résistance is Clause 80. I accept the case put by the noble Baroness, Lady Hamwee, that there is a good chance that this might be overlooked because of the position it occupies at the end of this part of the Bill. It is there because it relates to the exercise of all functions of the responsible regional authorities and the Secretary of State as regards regional strategy and bodies that are described only from Clause 67 onwards. So in drafting terms it follows logically from the description of those functions and bodies. I understand the force of the argument that it needs to be made more visible, more salient and more significant. Therefore I am sympathetic to Amendment 166A which has the effect of moving the clause to the front end of the regional strategy clauses, flagging up in lights the significance of that. I will therefore table an amendment at Third Reading to move Clause 80 to after Clause 69, ensuring that it follows the key clauses on regional strategy, Clause 67, and Clauses 68 and 69, which relate to the bodies which implement them. I hope that even though the beginning of that rather long speaking note was disappointing, I made up for it in the flourish of the final few seconds.