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New Towns Act 1981 (Local Authority Oversight) Regulations 2018

Volume 792: debated on Monday 9 July 2018

Motion to Approve

Moved by

That the draft Regulations laid before the House on 4 June be approved.

Relevant document: 33rd Report from the Secondary Legislation Scrutiny Committee

My Lords, these regulations are made under powers in Section 16 of the Neighbourhood Planning Act 2017. That section originates in an amendment to the legislation tabled by the noble Lord, Lord Taylor of Goss Moor, supported by the noble Lord, Lord Best, and others but also with the Government’s support. I know that both he and a number of other noble Lords who spoke in favour of the amendment when it was introduced are well placed to explain the purpose and merits of these regulations. I shall accordingly be brief in my opening remarks.

Section 16 of the Neighbourhood Planning Act enables, in principle, the creation of new town development corporations which are accountable to an oversight authority composed of the local authority or authorities covering the area designated for the new town, rather than to the Secretary of State. These regulations make the detailed changes to the New Towns Act 1981 to make that work in practice.

This will be the second time I have had the pleasure of amending the New Towns Act 1981, having done so in 1982, after it was introduced, while working as a junior Minister in the then DoE. Building on the success of the first-generation new towns, we consider that new town development corporations may be, where there are complex delivery and co-ordination challenges, the right vehicle for driving forward high-quality new communities at scale. With a statutory objective to secure the laying out and development of new towns, and with their own suite of powers, they should have the focus and heft to get things done.

In line with our locally led approach to new garden cities, towns and villages, we think it is right to provide the option for new town development corporations to be overseen not by the Secretary of State but by the local authorities covering the area for the new town. That, in essence, is what these regulations do, although, as their length testifies, it is in practice a little more technically complex than simply replacing the words “Secretary of State” with the words “local authority or local authorities”.

We have also, to the extent that the scope of the regulation-making power allows, sought to reinforce key themes which we think should underpin delivery by locally led new town development corporations. We have emphasised, through provisions in the regulations, the central importance of quality, community participation, long-term stewardship and legacy planning. We want to ensure that locally led new town development corporations deliver exceptional new places.

Clearly, where local authorities are accountable for new town development corporations, they must be able to exercise proper oversight, but we want to ensure that the development corporation is able to act and think independently, drawing in private sector expertise and investment in effective partnerships to get things done. Therefore, the regulations require that, for example, a majority of the board of the development corporation, including the chair and the deputy chair, are independent members with relevant skills and experience.

The new town development corporations will not have plan-making functions, as this power will rest with the oversight authority. However, we would encourage consideration being given to the use of local development orders where appropriate as a means of securing high-quality development at pace and strengthening the planning certainty of new town projects.

These regulations are an important localising measure and, given that context, a number of respondents to the consultation on the draft regulations expressed unease that HM Treasury consent was required for borrowing in excess of £100 million by the new town development corporations. We have listened to those concerns, including from Members of your Lordships’ House, and have amended the requirement in the regulations for HM Treasury consent for borrowing. Instead, we will establish the broad financial parameters for development corporations, including levels of borrowing, on a case-by-case basis prior to the establishment of each locally led new town development corporation.

Finally, I emphasise that these regulations do not in themselves create any locally led new town development corporations. Where a local authority or authorities—which will always initiate the process—wish a locally led new town development corporation to be established, subject to our being satisfied by the proposal and subject to consultation, further regulations will be laid before Parliament for debate.

These regulations are part of a process but they are an important stage. They mean that we can create locally led new town development corporations where local authorities want them and their proposals are robust. It is my hope that, in turn, those development corporations will lead the delivery of a new wave of garden cities and towns that will stand out as exceptional places for generations to come, building on the success of those built in the post-war years. I beg to move.

My Lords, I draw the House’s attention to my interests in the register. This is an area I work broadly in—much of it is unpaid but some of it is paid. I was also the original mover of this amendment, and I did so with not only the Government’s support but support from across the House. As the Minister said, this measure is not to establish specific new town corporations but to allow that where they are established—and I hope they will be established—they will be locally led. This is an extraordinarily important moment in the delivery of the homes this country needs and of the services and infrastructure to support vibrant communities. I believe that that is what the new garden village and town programme is capable of doing.

I ask the indulgence of the House for a moment as I give some perspective on this. It was Harold Macmillan in the 1950s, in the middle of the baby boom and during the period of post-war reconstruction, who committed to deliver 300,000 homes—the same number that we need to deliver today. Having delivered only half of that for a couple of decades, we have become short of millions of homes. Many of us experienced that shortage through our constituents in the other place, across all incomes and backgrounds and in many parts of the country. I suspect that many in this House have realised that suddenly, their children or grandchildren are unable to afford a home. Those who do not already own a home or have big capital have increasingly found themselves unable to do it.

In the post-war period, as we introduced planning controls, we sought to create three ways to deliver the homes that were needed. One was through the regeneration of the great cities and towns, which had been emptied out post industrialisation and by the Luftwaffe, and which needed a certain amount of emptying out to deal with the slums. Therefore, we needed to rebuild. The second focus was on some growth around historic towns and cities. There was an awareness, however, that that aroused a lot of opposition from the people who lived there and could have detrimental impacts on the quality of historic communities and the services provided within them. The third leg to deliver those 300,000 homes a year—which were delivered by the Government at the time—was through new communities: new towns that built on the pre-war ideas of Ebenezer Howard and others. Those new towns delivered 2.8 million homes and we would not have delivered the homes that people needed in this country without them. They were extraordinarily successful.

Of course, the new towns were designed in an era when we used a particular approach. Material shortages affected the quality of some of the build; the car was seen as a solution and not necessarily a problem; and it was an era of big government, when not just homes and people but businesses, such as steel works and car factories, were moved in the direction of central government. The nature of their design is often criticised, but those new towns successfully provided fantastic homes for many people. Some of the more successful new towns are no longer even thought of as new towns and have just become places where people live.

New towns were, however, no more than products of their era, and it was an era in which central government took the decisions. Naturally, therefore, the New Towns Act gave powers to the Secretary of State effectively to control the corporations delivering homes for local people in a way that simply does not apply now. The amendments that these regulations will put into effect bring the process up to date with the modern era of localism and a belief in communities themselves taking decisions, owning and controlling the assets, and ensuring that they provide exactly the legacy of great places that the Minister referred to. They will have the opportunity in capturing land value to invest in place and community, to create 21st-century towns and villages fit for the needs of those growing up now in a generation that is so badly short of homes. One of those needs is for the people and the communities around them to have that control, not the Secretary of State.

These regulations should not only be uncontroversial to this House but welcomed by it as a step in delivering the quality new homes and, more importantly, the new communities that people need in the 21st century, in which they can afford to live and thrive. It is also a step into the 21st century in terms of localism and local accountability. It is, as I said, an historic moment when we finally return to a place where we deliver homes of the quality that people expect and deserve, with all the facilities that they need to live and thrive.

I look forward to these regulations being used in cases where the best way to deliver the new supplement is through a new town corporation. As the Government have indicated, that would usually be for a larger scale supplement because it is doubtful that such a corporation would need to be established for a smaller one—although it might be established for a multiple of new supplements. The key is flexibility and that it is brought forward by local communities to meet their needs. I look forward to that happening. However, it will be only a part of a range of opportunities because many will be brought forward without the need for new town corporations.

Let us be clear: the very fact that landowners and investors know that this opportunity is there will probably encourage them to raise their game in the quality of what is delivered, because they know that otherwise, these powers will enable communities to step in and deliver what needs to be delivered themselves.

I welcome the regulations. I am obliged to the Ministers and their officials who have collaborated and spoken openly to me about this process. On the one key change that was made from the draft regulations, £100 million is a lot of money but, within the context of creating a new supplement, it is barely a start. For the Government to have required these corporations to keep coming back to the Treasury to ask for money to do what needed to be done when the principle was accepted seemed a nonsense, and I am glad that Ministers have responded to the concern that was widely articulated on that front.

My Lords, I remind the House that I am a vice-president of the Local Government Association, and I recognise the contribution of my noble friend Lord Taylor of Goss Moor in getting us to this stage.

As the Minister said, these regulations relate to both the new town development corporation model and to the oversight of them being transferred from the Secretary of State to local government where local government requests it—and, rightly, any designation will be subject to consultation and parliamentary scrutiny. As he also said, it is important that this process is locally led.

Our country has a proud history of the creation of new towns, mostly through the development corporation model. However, local government has a strong history of delivery—Northumberland County Council with Cramlington new town is an excellent example of local government leadership.

My noble friend Lord Taylor of Goss Moor referred to changing the regulations so as not to have an imposed borrowing limit of £100 million. That is the right thing to do. However, it means that strong financial controls will need to be in place and, in that respect, it will be necessary for the boundaries of the local authority oversight powers and the new town development corporation’s powers to be clarified in some detail in guidance as to exactly where the dividing line between the two is.

I am also pleased that the membership will be made up of a majority of independent members, who will have to demonstrate the required expertise and skills to make a success of the development corporation. However, what steps might the Government introduce in guidance to make sure that the appointment of independent members is a full and open process in which it can be demonstrated why they have been appointed?

My noble friend Lord Taylor of Goss Moor talked about the quality of development and the number of homes of quality that are required. He was absolutely right in what he has said. From my perspective, in order for this process to work, we need more highly professional planners who understand how to build communities rather than dormitory developments in the form of new housing estates. In my view, over recent years planning has become more about gatekeeping developers than strategic planning, so I hope that these regulations will be seen as a major opportunity to reverse that trend.

In conclusion, as the Minister said, this is about local ownership. Moreover, as my noble friend Lord Taylor of Goss Moor said, this should not be controversial because it is a major and welcome step forward.

My Lords, I declare my interest as a vice-president of the Local Government Association. I am happy to support the regulations before the House and I congratulate the noble Lord, Lord Taylor of Goss Moor, on securing this change to the legislation when the Bill was going through the House. I am very happy that we will provide local authorities with the option of being able to lead on new town developments. That is a good thing and, as other noble Lords said, will allow a level of independence so that they can go forward. Given that, I am happy to support the regulations as they are.

I was pleased that the Government listened to the responses to the consultation on the financial limits; that is very good news. However, the report of the Secondary Legislation Scrutiny Committee talks about the length of the consultation. I have mentioned a number of times the question of consultations from the department. This appears to be truncated down to four weeks, whereas ideally it should be six weeks and perhaps even longer. There is also a general point to be made about the consultation itself, in that, whether it produces negative or positive responses, the level of those responses is actually very low. The Government should look at ways of trying to get more people to engage with what they are doing.

I agree strongly with the comments of the noble Lord, Lord Taylor of Goss Moor, about the construction of new towns and bringing the process up to date. Indeed, it is a good intention on the part of the Government to deliver on this. A number of noble Lords observed that new homes must be of sufficient quality, which is extremely important. They must be properly energy efficient, built using the best techniques and set within the right infrastructure. In that way we will have homes in new towns and elsewhere that will be there for many years. If we do not get this right, we will simply create housing problems for future generations. I am conscious that in the 1950s, 1960s and 1970s, while Governments of all persuasions built a lot of housing, in the end a good deal of it turned out to be of very poor quality. For all the promises, those houses failed the families who had to live in them. Of course, some of the properties are still here today. So it is important that, whatever is built, be it in new towns or elsewhere, quality should underpin it. Hopefully, having a local element in new towns, with local people being fully involved, will help with that. Again, I am happy to support the regulations.

My Lords, I thank all noble Lords who have contributed to the debate, in particular the noble Lord, Lord Taylor of Goss Moor, for his continuing support and for putting these proposals into an historical context. As the Minister responsible for new towns in the 1980s, I found it rather nostalgic to be taken through the history of the new towns. As he and other noble Lords said, the climate has changed since then. There is more of an appetite for local engagement, and indeed, as the noble Lord, Lord Shipley, said, we now have the proven competence of local authorities to undertake major developments.

The noble Lord, Lord Taylor, said that the introduction of the regulations was a necessary and important step in helping to increase the country’s housing supply. Indeed, I think that there is general agreement on all sides of the House that localising new town development corporation powers will provide local authorities with a new and powerful vehicle for driving forward high-quality new communities at scale. I endorse what the noble Lord, Lord Kennedy said about quality. That is why we have written that into the regulations. The Government want the initiative to be a success and we recognise that the change that we have made, with the slightly lighter touch of the Treasury, makes it a more appetising proposition for local authorities.

I shall pick up some of the points that were made. The noble Lord, Lord Shipley, asked about the relationship between the oversight authority and the new town development corporation. Prior to agreeing to the establishment of a locally led development corporation, we would expect to see a proposal for governance arrangements that provided appropriate oversight of and independence for the new town development corporation.

On the membership of the development corporation, we want it to have operational independence to get on with the job, but we have required that the board should have a majority of independent members. In response to the question asked by the noble Lord, Lord Shipley, the appointment of the chair, the deputy chair and the independent board members should be through an open, transparent and publicly advertised process in line with the broader principles for local authority appointments. There has already been some indication of an appetite for these new regulations. The four local authorities that lead the North Essex Garden Communities project have expressed an interest in setting up a locally led new town development corporation.

The regulations provide a vital lever for delivering the transformational housing growth that we need while ensuring that surrounding existing communities will also benefit from well-planned infrastructure and community amenities. I beg to move.

Motion agreed.