Housing and Planning Bill

Public Bill Committee, 17 November 2015.

Examination of Witnesses

James Gray (Conservative, North Wiltshire)

I welcome you all to the third oral evidence session of the Housing and Planning Bill Committee. I am particularly glad to welcome our four witnesses today, from the Chartered Institute of Housing, the Planning Officers Society, the Royal Town Planning Institute and the Town and Country Planning Association. Perhaps you would be kind enough to introduce yourselves for the sake of the record.

James Gray (Conservative, North Wiltshire)

Thank you all for coming. We have until 10.15 am—45 minutes, or thereabouts—to hear your evidence.

Matthew Pennycook (Labour, Greenwich and Woolwich)

We know we need to build more homes, and I think that there is a broad consensus that we need to build homes across all tenures to meet the demand. Can you give us your view as to whether the Bill as a whole will increase the supply of housing across all tenures? Specifically on starter homes, what do you think the consequences for affordable housing will be? Do you think there is a risk that starter homes will crowd out other forms of affordable housing?

James Gray (Conservative, North Wiltshire)

Answer as you will, but all four of you do not have to answer every question.

Matthew Pennycook (Labour, Greenwich and Woolwich)

It would be nice to hear from the other witnesses as well, if we have time.

Matthew Pennycook (Labour, Greenwich and Woolwich)

We know that effective place making requires decent infrastructure. Do you have concerns, if starter homes are exempt from the community infrastructure levy, that the necessary infrastructure to build sustainable communities will not be there?

Kevin Hollinrake (Conservative, Thirsk and Malton)

Ms Alafat, you mentioned in your submission the need for local planning and development teams to have more resources. Do you not feel that the changes contained in the Bill on the planning system—to require a local plan by 2017, to make time timely decisions, and on planning in principle—will effectively ensure that local authorities properly provide the resources for their planning departments and prioritise that to ensure economic development?

Kevin Hollinrake (Conservative, Thirsk and Malton)

You would accept, then, that local authorities will need to look in more detail at this and prioritise resources in planning departments as a result of the changes.

Kevin Hollinrake (Conservative, Thirsk and Malton)

That is a matter for them to prioritise, isn’t it? Some local authorities have reduced resources within their planning departments back to 50%.

Kevin Hollinrake (Conservative, Thirsk and Malton)

That cannot be right. The developers we speak to every single day speak of their frustration with planning systems, because those departments are not properly resourced.

Kevin Hollinrake (Conservative, Thirsk and Malton)

Dr Ellis, you referred to the changes in the planning processes as radical. Would you expand on that?

Kevin Hollinrake (Conservative, Thirsk and Malton)

But local plans and neighbourhood plans have been through a democratic process.

Helen Hayes (Labour, Dulwich and West Norwood)

You have already touched on some of the issues I was going to ask about. I want to come back to the issue of place making. As representatives of the planning profession—I was once a planner myself—you know that planners try to secure the best possible place making outcomes across all types of planning decision making. Can you comment in broad terms, but perhaps with some detailed examples, on the implications of the Bill for the ability of planning to deliver high-quality places? What consequences might we see in future as a result of the Bill?

James Gray (Conservative, North Wiltshire)

Can I try to hasten us along a little bit? We have taken 25 minutes so far, and we still need to take questions. That is a slow rate of progress. We might try to make questions and answers quicker.

Helen Hayes (Labour, Dulwich and West Norwood)

I have one more quick question. Could you comment on the implications of the Bill for the involvement of local communities in the planning process?

James Gray (Conservative, North Wiltshire)

Not everyone need answer.

Stewart Jackson (Conservative, Peterborough)

The regulations in the previous Parliament allowing developers to challenge section 106 agreements freed up capacity and new build on dormant sites. Do you not agree that there is a case to be made that starter homes will do the same for marginal, brownfield sites under these proposals?

Stewart Jackson (Conservative, Peterborough)

It is therefore fair to say that, unless a site that is developed is 100% starter homes, the idea that no infrastructure will be developed is not the case. Another example from recent history is the affordable rent regime, which released extra funding to go back into community facilities infrastructure, along with other tenures. Surely that is the point. There will still be mixed-tenure facilities or developments, but an element of them will consist of starter homes.

Stewart Jackson (Conservative, Peterborough)

You said “can” rather than “will”.

Stewart Jackson (Conservative, Peterborough)

Dr Ellis, first, I have to say that I think it is pretty risible to compare the proposals in this legislation with Supreme Court challenges to US zoning policy based on racism. That is a ridiculous comment to make, frankly. Can I specifically ask you to concede that one reason why this is quite a strong piece of legislation in terms of direct intervention from the Secretary of State is the failure over a long period of local planning authorities to produce development plans in a timely and expeditious manner? You did not mention that at all in your evidence.

Stewart Jackson (Conservative, Peterborough)

You didn’t volunteer it either.

Stewart Jackson (Conservative, Peterborough)

It didn’t work. That’s why.

Stewart Jackson (Conservative, Peterborough)

No, it didn’t work. Regional spatial strategies did not work.

Stewart Jackson (Conservative, Peterborough)

They didn’t work.

Stewart Jackson (Conservative, Peterborough)

What I would say, to put it on the record, is that regional spatial strategies delivered the lowest number of homes since 1923 in the last year that they were fully operational before the coalition Government.

I want to move on to the evidence from the Chartered Institute of Housing. Can I ask about this figure of 48%? It is a rather confusing figure. I am always slightly surprised when I see in evidence the phrase “areas north of the midlands”. That doesn’t really specify where that is. What is it 48% of? Is it 48% of population? Have you published the data?

Stewart Jackson (Conservative, Peterborough)

You are inviting the Committee to conclude that the 20% discount on the market price is affordable on only 52% of transactions and purchases in the country—you are using local authority areas—and that on 48% it is completely unaffordable. I would challenge you on that, because I do not think that is true.

Stewart Jackson (Conservative, Peterborough)

You are not raising the issue. You oppose the policy, effectively, because of the evidence that you pray in aid from Savills.

James Gray (Conservative, North Wiltshire)

We should probably move on. I should perhaps remind you that the witnesses are here better to inform the Committee, rather than necessarily agree with us. That is an important thing to remember. I call the shadow Minister, Roberta Blackman-Woods.

Roberta Blackman-Woods (Labour, City of Durham)

There seems to be a supposition underpinning some of the clauses in part 6 that the reason we are not building enough homes in this country is that planning departments are too slow. Do you agree with that supposition? What do you think could be done to improve the planning system, without bypassing local communities in that decision-making process, as the Bill suggests?

James Gray (Conservative, North Wiltshire)

Can I encourage everyone to be as brief as you can? We have 10 minutes left and quite a lot of questions still to go. Can we have brief questions and answers, please?

Roberta Blackman-Woods (Labour, City of Durham)

I have a brief follow-up question. The Government’s preferred development model seems to be urban development corporations. We are being asked to pass legislation that will enable them to come through the Houses on a negative instrument. Do you think that is a good model, and should we be doing more to make UDCs locally controlled?

James Gray (Conservative, North Wiltshire)

I think we have got the general gist. Thank you very much.

Seema Kennedy (Conservative, South Ribble)

Dr Ellis, can I quickly go back to your written evidence? Is all your analysis through the prism of the 1947 Act, the nationalisation of development rights and all those things? Is that the gold standard by which you work?

Seema Kennedy (Conservative, South Ribble)

Would you accept, though, that the world has moved on? The nationalisation of planning has not really worked now. Up until 2010 the number of houses it was delivering, in the light of the 1990 Act, was too low and there needed to be radical change.

Teresa Pearce (Labour, Erith and Thamesmead)

Ms Alafat, reading through your evidence, you do not seem confident that one-for-one replacement of right to buy is likely to happen. What are your views on the fact that replacement, if it does happen, does not need to be in the same area? What effect do you think that would have?

Teresa Pearce (Labour, Erith and Thamesmead)

What do you think the consequences will be for the provision of affordable housing?

James Gray (Conservative, North Wiltshire)

In the two minutes left to us, Richard Bacon.

Richard Bacon (Conservative, South Norfolk)

Dr Ellis, you mentioned that it was a failed model, and I think many of us would agree with that. Do you think there is anything in current law or in the Bill that would prevent a local authority from taking a more strategic role—you mentioned Letchworth—in relation to land assembly and land capture?

Richard Bacon (Conservative, South Norfolk)

Before you continue, I was not really asking about compulsory purchase. It is not against the law for local authorities to buy land, is it?

Richard Bacon (Conservative, South Norfolk)

And it is not against the law for them to buy agricultural land, is it?

Richard Bacon (Conservative, South Norfolk)

And it is not against the law, having bought that land, to grant themselves planning permission on it, is it?

Richard Bacon (Conservative, South Norfolk)

Thank you.

Richard Bacon (Conservative, South Norfolk)

Because we have a failed model. Yes, I know that already. We agree on that.

Richard Bacon (Conservative, South Norfolk)

You have just said that it is not against the law.

James Gray (Conservative, North Wiltshire)

Order. Thank you very much, Dr Ellis. Sorry to interrupt you in mid-flow, but under the rules of the House we have to stop at precisely 10.15 am, when Big Ben chimes. I apologise for that. I thank all four of our witnesses for an extremely interesting and lively session, which I am sure has better informed the Committee. Thank you very much to the witnesses for coming, and for their evidence.

Roberta Blackman-Woods (Labour, City of Durham)

On a point of order, Mr Gray. The witnesses are here to give us evidence. It is really important that we are allowed to hear that evidence from the witnesses, and that their evidence is not crowded out by members of the Committee shouting. I do not think that is a sensible way for us to continue.

James Gray (Conservative, North Wiltshire)

I am most grateful to the hon. Lady for that point of order. Certainly, if any member of the Committee were shouting, I would be the first to call them to order. I tend to agree with the hon. Lady, because quite frankly, once or twice during that evidence session I felt that we were tending to disagree with our witnesses. It does not matter if we disagree with them; we should not say so. I acknowledge the hon. Lady’s point of order, and certainly, if there were to be any such disturbance I would be the first to come down very heavily indeed on it.

James Gray (Conservative, North Wiltshire)

I welcome the next panel. We have half an hour to speak to the Campaign to Protect Rural England and to Historic England. Sadly, one of the CPRE witnesses was unable to make it, I think because of ill health. We wish him a speedy recovery. I am sure that Mr Spiers will do a doubly good job. First, I ask the witnesses to introduce themselves for the record.

Roberta Blackman-Woods (Labour, City of Durham)

The CPRE has expressed concern that the starter home developments contained in the Bill will crowd out other forms of affordable housing. Clearly, the Minister has said that he thinks local authorities will be able to negotiate for other types of development as well. Will the members of the panel say whether or not they are convinced by that?

Roberta Blackman-Woods (Labour, City of Durham)

The CPRE has also expressed concern about the affordability of starter homes. Do you want to say anything more about that? Do you think the discount should be in perpetuity? Also, do you think that it will deliver more homes for rural areas?

Kevin Hollinrake (Conservative, Thirsk and Malton)

Mr Spiers, on that point, you have obviously read the voluntary agreement between the Secretary of State and the National Housing Federation. It details the fact that housing associations would have discretion not to sell, for example where a property was in a rural area and could not be replaced. Does that ease your concern?

Kevin Hollinrake (Conservative, Thirsk and Malton)

I accept that you are keen to get a definition, but as to your point about housing associations, Mr Orr said last week in evidence that housing associations

“do not want to move away from the business of providing housing for people who are in the greatest housing need”. ––[Official Report, Housing and Planning Public Bill Committee, 10 November 2015; c. 37, Q89.]

Why would you feel that they are likely to sell off houses when local communities need them?

Kevin Hollinrake (Conservative, Thirsk and Malton)

Talking about some of the provisions in the Bill, such as the brownfield register, I know the CPRE has been very keen on providing housing on brownfield sites. How do you think that will play out in future housing development?

Helen Hayes (Labour, Dulwich and West Norwood)

Taken in the round, the Bill introduces some fairly substantial reforms to the planning system. Could you comment on the extent to which, in your respective areas of expertise, you think that rural and heritage matters will continue to receive appropriate attention at the appropriate stages in the planning process and whether you have any concerns?

Helen Hayes (Labour, Dulwich and West Norwood)

On the concern about permission in principle and technical details, what would be an appropriate balance of heritage-related inputs at each of the two stages of the proposed new process?

James Gray (Conservative, North Wiltshire)

The CPRE wants to get a word in edgeways. Mr Spiers, please go ahead.

James Gray (Conservative, North Wiltshire)

Five colleagues want to ask questions in the 12 minutes remaining, so brevity is of the essence.

Chris Philp (Conservative, Croydon South)

You just raised the issue of local plans, Mr Spiers. Do you welcome the provision in the Bill that effectively requires local authorities to have a local plan in place by 2017, otherwise one will be developed for them? That could avoid exactly the kind of risk you outlined a moment ago.

Chris Philp (Conservative, Croydon South)

Will both witnesses confirm what I think is their view, namely that the emphasis in the Bill on brownfield development, combined with the maintenance of the sanctity of the green belt, should protect rural England from overdevelopment?

Teresa Pearce (Labour, Erith and Thamesmead)

Mr Spiers, you said that you do not have any confidence that the voluntary agreement, with the exemption for rural stock, will happen. Do you think that exemption should be in the Bill?

Teresa Pearce (Labour, Erith and Thamesmead)

In your evidence you said, on the agreement between the National Housing Federation and the Government, that you feel the right to buy failed to follow the guidance in the Treasury’s green book. If they had followed the guidance, what would they have had to do?

Richard Bacon (Conservative, South Norfolk)

Mr Spiers, you mentioned self-build. What scope do you think there is, particularly in rural areas that are provided for in chapter 2 of the Bill, to encourage local communities to do more self-build and custom house building? Does the CPRE see that as a problem, or do you welcome it?

Richard Bacon (Conservative, South Norfolk)

So in principle you support it.

Richard Bacon (Conservative, South Norfolk)

You said that landowners are unwilling to gift land or give it at a discount unless they think it is protected in perpetuity. Do you think there is a role for landowners to work more closely with, or even create, mutual housing co-operatives or to work with community land trusts to create the in-perpetuity protection that you are talking about?

Stewart Jackson (Conservative, Peterborough)

On the specific point about starter homes, as you know, Mr Spiers, for the past year or so the policy has been governed by ministerial fiat in respect of rural exception sites, which you mentioned earlier. Given that many people in villages want to try to retain familial links with their sons and daughters who perhaps do not have the wherewithal that they had to buy starter homes in villages, is it not better that you have some new homes within the framework of starter home policies within the village envelope? Most local planning authorities do not allow homes to be built in the open countryside; they allow them to be built only within the village envelope. It would formalise the situation in a more satisfactory way if there were more starter homes for local people in the village. In that respect, notwithstanding what you said about affordability, surely that is cumulatively a positive development.

Stewart Jackson (Conservative, Peterborough)

But that is not going to happen.

Stewart Jackson (Conservative, Peterborough)

In reality, is not the present situation just one extreme—that is, unsatisfactory infill, rural exclusion and probably small-scale? For those local authorities that do not have development plans and five-year supplies, an urban extension is stuck on the end of a village, where 100 homes might be built. The starter homes policy potentially, with the other permissive policies that are outlined in the Bill, actually achieves a medium and delivers more homes for people who cannot buy at the market rate.

Stewart Jackson (Conservative, Peterborough)

We agree on that.

James Gray (Conservative, North Wiltshire)

We have a few more minutes left. Does anyone have other views on the Bill that have not been winkled out in the course of our conversation so far?

James Gray (Conservative, North Wiltshire)

Mr Hollinrake has thought of a last-minute question.

Kevin Hollinrake (Conservative, Thirsk and Malton)

Mr Spiers, you concede that, if a property is sold through the housing association through the extension of right to buy, the person living there is still part of that social mix?

Kevin Hollinrake (Conservative, Thirsk and Malton)

Your villages must be different to my villages. I live in a rural area in north Yorkshire that is quite expensive, but a lot of the properties sold into the market through the original right to buy have people on lower incomes still living in them, having either bought them or rented them. I cannot accept that that is not part of the social mix you are trying to ensure. Those properties tend to be less expensive than the other properties in those villages.

Kevin Hollinrake (Conservative, Thirsk and Malton)

It is certainly the case now; we are 20 years on from the original right to buy, are we not?

James Gray (Conservative, North Wiltshire)

We have come to the end of our allotted time. To both Historic England and CPRE, thank you very much for your evidence, which has been extremely useful for the future deliberations of the Committee.

Examination of Witness

James Gray (Conservative, North Wiltshire)

We come to the high point or the low point—I am not sure which—of our deliberations: the Minister will address us. It is the high point of our deliberations, no matter which party we come from.

I take this opportunity to welcome to the panel the Minister, Mr Brandon Lewis, who I know wants to make a few opening remarks. I remind the Committee that we are here not to disagree or, indeed, to agree with the Minister, but to enlighten ourselves about his views with regard to the Bill.

Roberta Blackman-Woods (Labour, City of Durham)

We have heard from a number of witnesses—perhaps not the ones mentioned by the Minister—who pointed out that starter homes, although welcome, are not an alternative to genuinely affordable housing. On what evidence base did the Government decide to prioritise the delivery of starter homes above all other types of affordable housing, and what do they mean for our meeting the delivery of affordable housing targets locally?

Roberta Blackman-Woods (Labour, City of Durham)

We all accept that starter homes are part of the mix, but what will the Bill do to ensure that the whole mix is delivered? From witness after witness, we have heard that the prioritisation of starter homes will crowd out other sorts of affordable housing, which are needed as well. On what evidence base did the Government come up with the plan to prioritise starter homes over everything else?

Roberta Blackman-Woods (Labour, City of Durham)

However, do you accept that it is quite unusual to come up with a policy where witness after witness says that we all think it is good to support starter homes, but not at the expense of other types of housing, which are very much needed as well?

James Gray (Conservative, North Wiltshire)

I now have eight Members who have caught my eye for the 25 minutes left to us. With mutual respect and by keeping things as short as possible, we can get everyone in.

Stephen Hammond (Conservative, Wimbledon)

Is there any evidence to suggest that starter homes will necessarily crowd out other low-cost ownership, or indeed that every starter home will be built at the maximum? Is there not some evidence, particularly from the Council of Mortgage Lenders and others, that a number of the starter homes might be built well below that cap?

Stephen Hammond (Conservative, Wimbledon)

Presumably it is that mix that gives you confidence that some of the infrastructure that is needed will be built.

Mr Spiers, and indeed the GLA, have suggested that 95% of the brownfield sites are already under development or have planning permission attached to them. Is that a number that DCLG recognises?

Helen Hayes (Labour, Dulwich and West Norwood)

Yesterday in the Communities and Local Government Committee, we heard evidence from four councils. Two of them were Conservative-led, one Liberal Democrat-led and one Labour-led. All of them gave very compelling evidence that, despite the comments you just made about the ability of the Bill to deliver a mix, it simply isn’t there. They talked about the way in which the 1% rent reduction will undermine the ability of councils and housing associations to deliver new socially rented stock. One of the councils was up against its borrowing limit on its housing revenue account already, and said that once that is taken into account the receipts from homes that are sold under the right to buy will not be there to replace homes that are lost to the rental market.

The evidence from housing associations, which was previously heard by this Committee and also by the Communities and Local Government Committee, is that while many of them say that the Bill will deliver more homes as a whole, most of them say that they as individual housing associations will be delivering fewer of those homes at social rent. I am afraid that I am just not convinced by the statement that starter homes will be part of a mix, and that they will not crowd out much-needed homes for rent. I would be very grateful if you would say a bit more about where the evidence is for those statements, because I have not seen it.

Helen Hayes (Labour, Dulwich and West Norwood)

South Cambridgeshire District Council told us yesterday that it was up against its borrowing cap on the HRA, which meant that the receipts from homes sold under the right to buy would not yield sufficient funds to replace those homes. I hope that you will look at the evidence session, because I do not think that the evidence from four councils from all political persuasions, which was very powerful yesterday, should be ignored.

I want to ask about the issue that was raised in the earliest evidence session this morning about the lack of quality standards for the delivery of affordable homes and for urban development corporations. How confident are you that those measures will see genuinely high-quality development going forward?

Maria Caulfield (Conservative, Lewes)

I am pleased to hear that the starter homes are a mix of the affordable housing element. I wondered if the Minister could confirm—we did not hear it in the evidence in either session really—that for those on a low income, being able to afford a mortgage is crucial because mortgage monthly payments are significantly lower than rental monthly payments in the private sector. Could the Minister shed any light on that? Encouraging people to be able to own their own home would help those with low monthly incomes.

Maria Caulfield (Conservative, Lewes)

To return to the point about delivering one-for-one in the right to buy sector, I asked in a previous evidence session about housing associations looking at other models of house building—not just traditional house building but perhaps things like modular house building—but we did not really get an answer from the housing associations. What are your thoughts about alternative ways of building? Also, on pay to stay, we have heard that housing associations are worried about the 1% cut in council housing rent yet they could not say why they are not implementing the pay to stay measures that are already in place for those who earn £60,000 a year or more. That would bring them some income, so why are they not doing that to fund new house building?

Matthew Pennycook (Labour, Greenwich and Woolwich)

Minister, this is not in the Bill, but you have indicated previously that regulations will allow starter homes to switch to full market value after five years. I am struggling with that logic, and I wonder whether you can help me: at a time when you are asking for Government, across all Departments, to make greater savings, and given that the rationale is to ensure an affordable home ownership offer, what is the logic for giving people that windfall rather than ensuring that starter homes remain in perpetuity as affordable homes?

Matthew Pennycook (Labour, Greenwich and Woolwich)

What assessment has the Department carried out on the number of people who are currently unable to buy their own home but will be able to do so under the starter home programme? I asked a previous witness about this but did not get a satisfactory answer. In essence, I am trying to get at what estimate you have done of the widening of the home ownership pool that the Bill and the starter home policy in particular will create. What are the numbers over and above those already in a position to buy their first home?

Matthew Pennycook (Labour, Greenwich and Woolwich)

Can I push you on what assessment you have made?

Chris Philp (Conservative, Croydon South)

To develop the question about home ownership versus rental, would you agree with the analysis that Crisis and Shelter alluded to that home ownership is a fundamentally better form of tenure because it is more secure and the person owning their home gets to participate in house price growth? As Maria Caulfield said, it is often cheaper as a form of occupancy than the private rental sector. Is that part of the reason why you are so keen to promote home ownership?

Chris Philp (Conservative, Croydon South)

Do you agree that extending home ownership is an effective way of fighting poverty?

Chris Philp (Conservative, Croydon South)

Absolutely. To pick up a point that was alluded to by the planning witnesses earlier, they mentioned that planning departments in councils are under-resourced, which is probably broadly true. Do you have any sympathy for proposals that some developers have made that they would be willing to pay much higher planning fees provided that they got a better service in return? For example, if they did not get the service, the enhanced fee might get refunded? I know it is a complicated area and the council might simply swipe the money. Do you have any views on those proposals?

James Gray (Conservative, North Wiltshire)

Quickly.

Peter Dowd (Labour, Bootle)

The Government have pledged that property sold via right to buy will be replaced on at least a one-to-one grant basis, a one-to-one grant being provided for that purpose. Existing state aid rules do not allow for the Government to provide such aid to home builders, save for the provision of social housing. If grants are provided, for example, for building housing for commercial sale, it is possible that it would breach state aid law and give housing associations an unfair advantage over commercial house builders. What assurances can the Committee have that such a grant arrangement will be compliant with state aid?

Peter Dowd (Labour, Bootle)

You are giving that assurance?

Peter Dowd (Labour, Bootle)

So you are giving us the assurance, yes?

Kevin Hollinrake (Conservative, Thirsk and Malton)

Going back to starter homes and affordable rents, you talked at the Select Committee about local authorities and developers still being able to negotiate arrangements to suit local needs. Will you expand on that to say how that will happen in practice?

James Gray (Conservative, North Wiltshire)

That brings us to the end of our three evidence sessions preparatory to our detailed consideration of the Bill. I hope the Committee will agree that it has been an extremely useful series of panels. I thank the Minister for appearing in front of us and for being frank and straightforward in his responses. We will meet next on Thursday at 11.30 am in Committee Room 12 to start detailed, line-by-line consideration of the Bill. I thank the members of the Committee for their patience and I hope we have managed to get as many members in as possible during the question session.