§ The Minister for Housing and Planning (Keith Hill)In December 2001 the Government published a consultation paper proposing that local authorities should set standardised tariffs for different types of development as a substitute for the negotiated planning obligations permitted by section 106 of the Town and Country Planning Act 1990. In July 2002 the Government indicated that they had decided not to proceed with this proposal and would consider other options. They also indicated that many of the Government's objectives could be achieved through non-legislative routes.
Today I am publishing a further consultation document seeking views on firm proposals for the reform of planning obligations. These proposals contain a mixture of administrative and legislative reforms and are designed to increase the speed, certainty and transparency of the planning obligations while retaining flexibility.
New development brings benefits to communities, including homes, jobs, and a range of new services and facilities. Investment in land and property is also an important component of economic growth and higher productivity.
New development can also have an impact on services and infrastructure in the local area. The existing system of planning obligations permits planning authorities to seek contributions from developers, which are used to mitigate negative impacts. They therefore facilitate development, which might otherwise not occur. So planning obligations help the developer, the community and the local authority to work together to deliver successful and sustainable communities.
However, the current system of negotiating planning obligations is often slow, resource intensive and lacks transparency. Development is often delayed rather than facilitated by the process.
The Government have therefore decided to introduce changes designed to give developers the choice between the current negotiated approach offering flexibility and a pre-determined charge, which offers speed and certainty. We will legislate within the Planning and Compulsory Purchase Bill to introduce this new optional charge. We will also revise our existing statement of policy on planning obligations, Circular 1/97, to remove the inconsistency which the policy exhibits compared to case law, to require greater transparency in the use of negotiated obligations, to encourage best practice and to set out our policy in relation to the new charge.
Local planning authorities would be required to set out their charge proposals in advance, giving the developer certainty as to the level of the contribution they will be asked to make and an indication of the impacts of development to which charge income will be 41WS applied. This requirement will also mean that assessing and mitigating the impact of development will become a plan-led activity. If developers opt to pay the charge, we propose that legislation would prevent local planning authorities from seeking any further financial or in-kind contribution in respect of those matters covered by the charge. Our consultation document invites views on the matters that would be covered. However, planning obligations can extend to non-financial matters as well and we expect that where the charge is paid, a residual negotiation may have to take place. But we are determined to ensure that our final proposals do not ask developers to pay twice.
The developer will always have the option not to pay the charge and to negotiate in the same way as the present system allows. For example, negotiation might still be necessary for difficult, financially marginal or special cases where a negotiation can better mould the agreement to the proposed development. We propose that our new policy will require all local planning authorities to adopt existing best practice and set out the matters to be covered in negotiation in local planning instruments. So transparency and predictability will be increased even where the developer opts not to pay the charge.
We propose to amend the Planning and Compulsory Purchase Bill to enable us to make these reforms. These amendments will provide a power to establish the new optional charge but we intend to use secondary legislation to set out the detailed framework. This secondary legislation will be informed by the outcome of the consultation, an approach that will enable business, local government and other stakeholders to contribute to the development of the new system. To aid this further, I aim to publish draft Regulations in January and in spring 2004 we will also consult on a new draft Circular to replace Circular 1/97.
The consultation period runs until 8 January 2004 and we welcome views on how best to make our proposals work for everyone involved in securing sustainable communities: developers, local authorities and the communities they serve.
The Government appointed Kate Barker earlier this year to investigate factors affecting the supply of housing, including the role of the planning system. The Government will consider any relevant recommendations of the Barker review before it finalises its planning obligations policy in summer 2004. Representations already made to the Barker review on the subject of planning obligations will be taken into account as the Government finalise their policy.
In conclusion, the Government believe that the proposals offer an opportunity to resolve this difficult area of policy in a way, which retains flexibility where necessary and offers speed and certainty where possible.