My Lords, I thank noble Lords who have participated in the debate on Amendment 3 in relation to office-to-residential conversion. I particularly thank my noble friend Lord True and the noble Lord, Lord Tope, for bringing before us again the issue of permitted development rights for change of use. This enables me to set out in more detail the proposal that I put before noble Lords on Report in a very sketchy form, and to which I promised to return. At the time, I spoke about the potential benefit of allowing greater flexibility over whether the permitted development right for the change of use from office to residential should apply to those areas that are delivering the homes that their communities need. I am sure noble Lords will agree that it is in everybody’s interest to ensure that we do not put future housing delivery at risk. In fairness, that point was made by the noble Lord, Lord Tope.
The housing White Paper sets out compelling evidence of why it is crucial that we fix our broken housing market—one of the greatest barriers to progress in Britain today. Noble Lords will know that in the year to March 2016, over 12,800 homes came from the change of use from offices to residential alone. However, as I said on Report, I recognise that while the national picture is positive in terms of the contribution of permitted development rights to housing delivery, in some places there have been concerns about the local impact.
We can all agree that some authorities are high performers in delivering new housing. I am therefore pleased to confirm our future approach to Article 4 directions to remove the permitted development right for the change of use from office to residential where the local planning authority is delivering 100% or
more of its housing requirement. As we have set out in our recent housing White Paper, we will introduce a new housing delivery test which will measure an area’s local housing delivery against its housing requirement. It is proposed that the housing delivery test will be measured as an average over a three-year rolling period and data will be published alongside the net additions statistics in November each year. We propose that housing delivery will be assessed against an up-to-date local plan, London Plan or statutory spatial development strategy—or in their absence, published household projections—and that the first housing delivery data will be published in November this year. This will indicate to local authorities whether this additional Article 4 flexibility would apply to directions they brought forward after this date.
We are committing today that, following the publication of the housing delivery data, where an authority is meeting 100% of its housing delivery requirement and can continue to do so after removal of the right, and where it is able to demonstrate that it is necessary to remove the right to protect the amenity and well-being of a particular area—that might address the point that the noble Lord, Lord Tope, raised; there is still that continuing obligation although it may conceivably be a larger area than at present, but there is not the necessity to satisfy that test—the Secretary of State will not seek to limit a direction applying to that area.
When considering whether to bring forward an Article 4 direction regarding office-to-residential conversion, the local planning authority must demonstrate that it can continue to meet its housing requirement when the right is removed. This provides an important safeguard to ensure that local areas will continue to deliver the homes that communities need. For instance, we know that in the year to March 2016, the homes delivered under the right made a significant contribution to housing delivery in some areas.
Importantly, the Article 4 direction must continue to meet the test set out in the National Planning Policy Framework. As I say, the local planning authority must still provide robust evidence to demonstrate that removing the permitted development right is necessary to protect the amenity and well-being of the area where the right is to be removed. This could include impact from the loss of office space. I hope that is helpful to the noble Lord and to other noble Lords who have participated in the debate on the Bill. Where these tests are met, we would look more generously at the area across which the direction would apply and not seek to limit the direction. Of course, housing delivery changes over time. Therefore, local planning authorities should review their housing delivery annually and, if it falls below 100% in subsequent years, we would expect them to review the direction and cancel or modify it as necessary. The local authority may then be able to bring forward a further direction at a later date on the back of improved delivery where it had dipped below the housing delivery test.
This approach reflects the intent of the noble Lords’ amendment. It allows areas that are meeting their housing requirements local flexibility in having a greater say over where the right will apply as long as they can demonstrate that removal of the right is necessary and that they will continue to meet their housing need.
It enables local planning authorities to determine such cases in accordance with their local plan, any neighbourhood plan and other material considerations. At the same time, it provides safeguards should housing delivery decline. Moreover, it does so within the existing Article 4 processes, with which local planning authorities are familiar.
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The noble Lords also raised concerns on Report about planning application fees but, before I move on to that, I want to respond to a point raised by the noble Lord, Lord Tope, about the compensation payable and the 12-month notice period. National permitted development rights are set at a level which the Government believe is generally appropriate across the country, and only in exceptional cases should local authorities find it necessary to restrict these rights. In many cases, local authorities can avoid a compensation liability, as the noble Lord said, by giving 12 months’ notice of their intention to introduce an Article 4 direction. So they could proceed with an Article 4 direction without notice but, in those circumstances, they would be liable to compensation, and we are not proposing to alter that provision.
I turn to the loss of planning application fees where an Article 4 direction is in place and the impact that this has on local authority resources—a matter on which my noble friend Lord True and the noble Lord, Lord Tope, have also focused. I am pleased to be able to respond to the concerns on this front as well, and I can today commit to a further measure to support local authorities.
We will bring forward regulations to allow local planning authorities to charge the statutory planning application fee where permitted development rights are withdrawn by an Article 4 direction. We believe that this is an important step in recognising the resource commitment for authorities in determining planning applications in areas where the permitted development rights have been removed for sound policy reasons. This will further support timely local decision-making in bringing forward development quickly in accordance with local needs.
Noble Lords will be aware that we have committed to a 20% uplift in application fees from July where the funding is to be used to support the planning function of the local authority. I can confirm that this uplift will also apply to the fee for prior approval. We believe that this approach in respect of Article 4 directions provides local flexibility for areas that are meeting housing need, while ensuring the continued delivery of homes under the right. As I committed to do on Report, I have set out this approach today and I have also set it out in a letter to my noble friend. I am not sure whether that letter has reached him but I will place a copy in the House Library. This will be supported by detailed guidance, which we will provide nearer the time.
In closing, I thank both my noble friend Lord True and the noble Lord, Lord Tope. I have a graphic image of the two of them on a tandem coming through south-west London and initially facing a strong headwind but now heading for the sunny uplands with a gentle
breeze. It will be an image that is with me for some time. However, I thank them for the reasoned, constructive and patient way in which they have approached this issue—particularly my noble friend Lord True, who I know has been absolutely determined in relation to this issue over a considerable time and has approached it with great courtesy and great patience. However, in the light of the commitments that I have made, I respectfully ask him to withdraw his amendment.