My Lords, I am speaking to Amendments 336 to 339 and 354 in my name, all concerned with the mechanisms of the new infrastructure levy.
Amendment 336, supported by the right reverend Prelate the Bishop of Chelmsford, would require planning authorities, when devising their charging schedule for the new infrastructure levy, to recognise that different kinds of development have different levels of viability and profitability. Not least, building specialist accommodation for older people needs more help than building standardised, uniform homes for sale or rent with the minimum of extra amenities. The amendment seeks to ensure that the charging schedule for the infrastructure levy recognises that more help from the levy will be needed for more specialist developments.
We have had excellent debates in this Committee on housing for older people, and indeed on how the socially worthwhile elements of new residential developments affect viability, so I will not detain your Lordships by making the case that the new levy arrangements should enhance the production of much-needed supported housing, such as retirement accommodation. I simply commend this tweak to the IL arrangements.
I am also speaking to the cluster of amendments in my name—Amendments 337 to 339 and 354—that all relate to one key point. They come from the well-respected Royal Town Planning Institute and are intended to simplify the processes for creating the infrastructure levy. They would do so by getting rid of the requirement for an independent examination of IL charging schedules, relying instead on a simpler, direct relationship between the local planning authority and the Secretary of State.
The RTPI argues that, since the Bill already gives the Secretary of State the power to intervene if the examination outcomes are regarded as unsuitable, an additional independent examination is an unnecessary extra step and should be replaced, in setting the IL rates, by direct dealings between central and local government. That would have the beneficial effect of deterring the lengthy and costly legal challenges to charging schedules that can otherwise be expected.
As noble Lords know, the Bill introduces a new mandatory framework for local planning authorities to extract the infrastructure levy from developers carrying out new development. Local planning authorities will
be required to prepare a charging schedule and a price list outlining local costs and thresholds of development for the levy, and to consult the public accordingly. In addition, the Bill then requires an independent examination, probably by the Planning Inspectorate, before the charging schedule is published. The Secretary of State will be empowered to require charging schedules to be amended.
All this can become a long-winded and expensive process, so the amendments seek to cut out one of the sources of delay and cost. The Bill’s impact assessment says the new system is estimated to cost between £12 million and £18 million, absorbing a portion of the levy to cover those costs. Ministers have indicated that they expect the implementation of the infrastructure levy to take place over this decade, and the impact assessment explains that the expected start-up and administrative costs for the recruitment and training of personnel in local authorities are expected to be no less than £147 million, and perhaps as much as £440 million, over the 10-year appraisal period.
At present only about half of local planning authorities, 48%, have introduced the current community infra- structure levy, the precursor of the new infrastructure levy. The other councils have considered it unfeasible to introduce the CIL, not least because of the cost. That emphasises the need to keep things simple for the new infrastructure levy.
The amendments would remove the requirement for charging schedules to be examined independently, representing a significant simplification. That would reduce the otherwise heavy administrative burden for the Planning Inspectorate in examining every local authority’s charging schedules within a defined period, which would require considerable extra capacity. The Bill ensures accountability through public consultation, which should mean that infrastructure provision recognises the community’s wishes, and through the guarantee of the Secretary of State’s reserve powers to intervene when necessary.
Amendment 335 was introduced ably by the noble Baroness, Lady Warwick of Undercliffe; if more than four names had been allowed in support of this one, mine would have been one of them. The amendment would prevent infrastructure levy receipts being spent on any unspecified items rather than being used for affordable housing or infrastructure. When the Bill was in Committee in the Commons, the Minister said that
“the levy regulations may allow levy receipts to be spent on matters other than infrastructure”—
or affordable housing—
“such as improvements to local services and delivery of local programmes that are valued by local communities. Although the infrastructure levy will primarily be spent on infrastructure and affordable housing, that will give us the scope to allow local authorities more flexibility over how they spend the levy if those priorities have been met”.—[Official Report, Commons, Levelling-up and Regeneration Bill Committee, 6/9/22; col. 622.]
That somewhat open-ended statement is a bit confusing. It is not of great concern if the final words are the key—namely, that there is flexibility over how councils spend the levy if the infrastructure and affordable housing priorities have been met—but if that opens up the IL resources to be spent on any number of good causes, the whole concept of an infrastructure levy is derailed. Can the Minister please reassure the Committee
that this is not an opening of the door to all kinds of worthy but quite different spending? Amendment 335 would clarify the position, and I strongly support it.