My Lords, in moving Amendment 41, I will speak to Amendments 42, 43, 44, 45, 46, 47, 48 and 49. With this group, we seek to ensure that when the Secretary of State awards costs, he does so in keeping with the principles of good consultation and in a way that is beneficial to the planning process.
Ensuring that all parties to an appeal act reasonably is of course essential, but the clause risks overly penalising local authorities and working against localism. If the risk of being designated as failing is not a strong enough deterrent for local authorities to turn down inappropriate development, the risk that they might have to pay the costs of appeals certainly will be. There are concerns that the costs of appeals are inhibiting a true localism. Given that, how can increasing the number of instances in which a local authority would have to pay the other party’s costs be beneficial, especially given shrinking budgets and the huge resources that developers often have at their disposal to undertake appeals? When local authorities consider the risk of having appeal costs awarded against them alongside the risk that any decision overturned at appeal may contribute to their designation as failing, that makes it much more likely that developments, whether good or bad, will be nodded through by a local authority.
At present, costs are awarded in very few instances. The impact assessment sets out that, last year, costs were awarded in only 3.7% of cases but goes on to predict that, under Clause 2, the number of cases would rocket, with costs being awarded in as many as 20% or more of all appeal decisions. Worryingly, the Minister’s department has made no estimate of the amount that that would cost local authorities or any other party; hence, the need for amendments to allow for clear criteria and proper regulation of the procedure.
Amendments 41 to 47 specifically target the need for proper criteria to be used when assessing whether costs should be awarded. The impact assessment states that,
“this measure will lead to an increase in the number of costs awarded at least in the short term until longer term behaviour changes”.
However, there is no assessment of how long that might take. Published criteria, set out in regulations, would surely speed up the change in behaviour more effectively. Such criteria would allow the Secretary of State to define what would be deemed unreasonable behaviour and would therefore encourage, rightly, local authorities to avoid it. There is no benefit in giving the Secretary of State discretionary powers to award costs in the hope that it will change behaviour unless the instances in which costs are to be awarded are plainly set out. Furthermore, as the clause will allow the Secretary of State to award a portion of costs, he will need clear guidance in setting out the formula on which the portion of costs is to be awarded and perhaps, more importantly, how it is to be calculated.
Amendment 48 is key to this argument that we are making against the clause. New sub-paragraph (11) allows the Secretary of State to subsume to himself personally any power in connection with the award of an appeal. Can the Minister explain why the Secretary of State would require individual power to award costs, independent of the experts appointed to decide such an award? The amendment seeks to ensure that such power will be used only when it is to the benefit of all involved. It is difficult to conceive of a set of circumstances in which that might be the case; nevertheless it is important that some restraints are put on the Secretary of State’s powers under the sub-paragraph. We need to ensure that the Secretary of State is able to take such power unto himself only if parties to the appeal agree that it is appropriate in the circumstances.
Amendment 49 further constrains the power proposed in sub-paragraph (11). It seeks to ensure that the Secretary of State will make any decision under the sub-paragraph in accordance with published criteria, which would be extremely useful to assist in trying to determine what is in the Secretary of State’s mind. We want the Secretary of State to publish criteria that can be assessed to see whether he is making a fair and even-handed decision about the award of costs, and we want a requirement for him to publish his reasons for his decisions. Not only do we want open and transparent criteria that will inform decisions but we want them to be published. We also would wish to know, in particular circumstances, how they are being applied.
We would like the Secretary of State to publish his reasons. It should not be the role of local authorities, the other agencies involved or Parliament to try to work out what the reasons might have been in any particular set of circumstances. We want it to be clear and transparent. We would have thought that this was something that the Government also would want. I beg to move.