My Lords, I will speak to the amendments in this group in my noble friend Lady Hayman’s name and in my name, and comment on other amendments submitted. As this is the first group on the infrastructure levy before the Committee, I will make some general comments, which I will try not to repeat in future groups so as not to test Members’ patience.
The introduction of the infrastructure levy has broadly been welcomed by local government and the Local Government Association, as it is non-negotiable and set at a local level. I hope that, eventually, it will rationalise the current system of the CIL and Section 106. However, as my grandmother is from Wiltshire, I feel justified in saying that it is a jiffling picture at the moment.
The proof of its success will be whether the levy delivers more in infrastructure, affordable housing and, key to this group of amendments, some of the social infra- structure that greatly concerns local residents when they hear of new development. Key to this is whether, as the current community infrastructure levy and Section 106 system transitions to this new arrangement, the levy actually delivers at least as much as, if not more than, the current system. What protections does local government have against the temptation for Secretaries of State—I will not name anyone—to top-slice the infrastructure levy?
Forgive my cynicism, but I have the clear memory of the new homes bonus in mind. The new homes bonus was, first, top-sliced from local authority budgets then cut in successive years, so it was really just another mechanism to cut local government budgets. I know that the infrastructure levy is substantially different, in that funding is delivered from the development sector, but will this be too tempting a pot for the Treasury to resist?
The LGA has expressed concerns that significant elements of the levy are not yet clear in the Bill, such as definitions of larger sites, rate-setting and the relationship between different tiers of authorities that will be in receipt of the levy. There also needs to be a clear definition of what infrastructure is in scope and what is not, which is the subject of many amendments in this group. For example, if the system is to move on from Section 106, how will contributions towards issues
currently funded by that method be treated, such as skills, apprenticeships and the local workforce—in other words, issues that sit outside the built environment?
Local government has also urged the Government to reconsider the timing of the levy. The new system as proposed may help developers’ cash flow, but local authorities want to ensure that infrastructure is provided early in the development process so that existing local residents can be reassured that there will not be an uncomfortable transition phase while the provision of infrastructure lags behind development and results in a period of pressure on existing resources. I moved around our new town four or five times when I was growing up, as new developments were built, each time to areas with no shops or services and little in the way of public transport. The sequencing of infrastructure is really important.
Like many other voices in local government, I have long been an advocate for removing the permitted development process, which undermines local plan-making and the quality standards of new homes. But if the Government insist on retaining permitted development—it looks as though they will—there must be a way of applying the levy to such change-of-use developments.
Many of the amendments in this group are seeking some clarity from the Government about how the infra- structure levy can be used and how they will demonstrate what is being achieved in this respect. Our Amendment 314, in the name of my noble friend Lady Hayman, raises the key issue of demonstrating how the levy will impact public transport in travel-to-work areas and requests that the Minister must publish within two years of Royal Assent a summary setting out progress. If we are serious about reducing car dependency to aid our net-zero ambitions, clear commitments from this legislation are essential.
Similarly, Amendment 315 probes whether the levy may be used in relation to the contribution required for restoring railways. We have heard a great deal in earlier discussions on the Bill about, for example, the use of restored former rail routes to improve interconnectivity. The levy could provide a very important contribution to this. We hope that when we see the detail of the regulations associated with the levy, it will be empowered to do so.
Amendment 316 again probes the intended scope of the infrastructure levy. When we talk to local people, their concerns about new developments, as well as the impact on the environment, are often about the pressure that these put on services and facilities that meet local and strategic needs and contribute towards a good quality of life, such as health provision, education, community, play, youth services, recreation, sports, faith and emergency services facilities. Too often, they have felt that developers focus just on the profit side of the equation, with little regard for the needs of existing communities or those for whom they are building. Although CIL and Section 106 have made some provision for parts of social infrastructure in the past, they have been too limited in the amount provided and in restrictions on what is provided. As an extreme example, in my borough, a Section 106 agreement could be used only to deliver a bus shelter in an area that had long since lost its only bus service. We would
like to see a broad scope for the infrastructure levy, driven locally by local need and with flexibility for it to be used in appropriate ways as communities develop.
It would be wrong not to mention the knotty issue of viability. I draw attention to the Explanatory Notes to the Bill, which say at paragraph 725:
“The purpose of IL is: to ensure that the costs incurred in supporting the development of an area (including by the provision of affordable housing), and achieving any additional purpose specified in IL regulations, are funded at least in part by owners or developers of land, but in a way that does not make development in the area economically unviable”.
One has to ask: unviable to whom? If the infrastructure needed is not to be provided through this route, how is it to be provided? Will it be by the local authorities which are already so strapped for cash they are cutting services, not developing them, or by the Government? My noble friend Lady Hayman’s Amendment 343 seeks to specify a wider scope for the infrastructure levy in the Bill, so that it is clear that developers may be asked to make wider contributions to the infrastructure demands that their development is driving.
Amendment 355, in my name, seeks to limit the circumstances in which the Secretary of State can direct a charging authority to review its charging schedule. We understand why it may be necessary to ensure that charging schedules are kept up to date, but surely these timescales are for local determination, and it should be only in the most extreme circumstances that intervention would be necessary. The community infrastructure levy itself is a relatively new form of charging infrastructure against developments, so it will be important to have a benchmark on what it has achieved in this respect so that it is possible to assess the infrastructure levy against the current arrangements.
I will comment briefly on other amendments in this group. The amendment from the noble Lord, Lord Russell, is to ensure that large-scale developments can be required to provide funding for childcare services and settings. My noble friend Lady Hayman’s Amendment 343 also seeks to broaden the scope of social provision under the infrastructure levy. In her amendment to Schedule 11, paragraph (c) refers specifically to nurseries, so we support this amendment. The plea of the noble Lord, Lord Russell, was powerfully made. Having been a single parent myself, I know that the issue of nurseries and childcare is really vital, but we need to identify what the infrastructure levy can do with capital and revenue funding streams. It is no good building nurseries if there is no funding to run them. The noble Lord, Lord Young, was right to raise the complex issues around funding for childcare. If we are going to resolve some of this through the infrastructure levy, we need to understand how.
There are a number of amendments in the names of the noble Lords, Lord Greenhalgh and Lord Wasserman, and the right reverend Prelate the Bishop of Exeter regarding the implications of the infrastructure levy for our emergency services. We understand the motivation behind these amendments: although emergency services may be asked to comment and make submissions on planning applications, they are, more often than not, unable to be there at the point of decision-making. It is important that the Bill gives clarification on how emergency services are to be treated for the purposes of the infrastructure levy.
Amendment 335, in the name of my noble friend Lady Warwick, the noble Baronesses, Lady Watkins and Lady Thornhill, and the right reverend Prelate the Bishop of Chelmsford, seeks to ensure that infrastructure levy funds cannot be used by local authorities to cover the costs of unspecified items. The wording in Schedule 11, which this amendment would remove, is simply not clear enough. The amendment highlights again how important it is that the Bill is absolutely clear about what can be covered by IL and what cannot.
We are grateful to the noble Lord, Lord Best, for his tireless pursuit of opportunities that the Bill could give to increase the delivery of supported housing, particularly for older people. We believe that this should be a strong consideration in the structure of the infrastructure levy, so we support his amendment. The noble Lord’s Amendments 337 to 339 and 354 all refer to the independent examination of the IL charging schedules by an independent examiner. We look forward to the Minister’s comments on the rationale for this provision in Schedule 11. Is this service to come under the remit of the Planning Inspectorate? If not, who will carry out this role, how, and how will they be appointed?
In respect of Amendment 348 from the noble Baroness, Lady Scott of Needham Market, we are interested to hear the views of the Minister on the treatment of town and parish councils under the new infrastructure levy regime. There are over 10,000 parish, town and community councils in England, ably represented by the National Association of Local Councils. Is it the intention of the Bill that these councils be a specified recipient of the neighbourhood share of the infrastructure levy; for that share to be 25%, or 35% for a parish council with a neighbourhood development plan; and for a parish council to have full flexibility over how those receipts are spent?
NALC believes that the higher CIL amount provides an additional incentive to undertake a neighbourhood development plan and to identify extra investment in infrastructure or anything else concerned with addressing demands of development. Do the Government intend to build on CIL for the new infrastructure levy, with a parish council being the body which will receive the neighbourhood share? They are not named explicitly in the Bill. Will the uplift in neighbourhood share still be available to parish councils which have prepared a neighbourhood plan?
I hope your Lordships will forgive me for a long intervention, but this is a huge group with a lot of different amendments in it. In summary, a great deal of clarification is needed around the introduction of the infrastructure levy. We urge that as much of this clarification as possible is included in the Bill and that there is a thorough period of pilots introduced to test the implementation of the infrastructure levy in practice and whether it can deliver against the opportunities that it should be able to realise.
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