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Planning Bill

moved Amendment No. 134: 134: Clause 202, page 115, line 31, at end insert— ““( ) The regulations must ensure that CIL is not payable in respect of land which the owner or developer is using for the purposes of providing social housing as defined by section 68 of the Housing and Regeneration Act 2008 (c. 17) (basic principle).”” The noble Lord said: My Lords, Amendment No. 134 is grouped with Amendment No. 151, both of which address affordable housing. Their purpose is to ensure that there is not an unintended consequence of reducing the amount of affordable, or social housing as now defined by the Housing and Regeneration Act 2008, as a result of the introduction of CIL. I am grateful to the National Housing Federation, Shelter and the Chartered Institute of Housing for working on these amendments, and I declare my interest as chair of the Hanover Housing Association. The housing associations are currently struggling to produce any affordable housing. The house-building industry is in dire straits, so fewer affordable homes are emerging from housing associations obtaining a percentage of the homes under Section 106 agreements. Where housing associations are going it alone, they are having big problems in getting the mortgages they need in the current financial banking crisis. When they do get mortgages, interest rates are much higher and they are trying to produce more family homes instead of the many one and two-bedroom flats. They are trying to achieve new environmentally sustainable standards. All those things add to costs, and the very last thing they need is a new community infrastructure levy that will impose additional costs on them. In the Milton Keynes pilot, the levy was £18,000 for each house. Even if the average in other places was lower—say £10,000 a house—it is a considerable burden for the social housing providers to take on at a time when they are struggling to produce any affordable housing at all. I know that the Government agree with the sentiment behind the amendment and they have already said that the aim is to ensure that there is no reduction in the output of affordable housing. We are as one in our hopes that CIL will not lead to any reduction in the amount of affordable housing. My proposal for ensuring that that happens comes in these two parts. Amendment No. 134 simply exempts all social housing from CIL. It uses the definition of social housing in the Housing and Regeneration Act 2008. That is nice and clear and clean. The more social housing in a development—25 per cent, 35 per cent or 50 per cent—the more exempt properties as far as CIL goes, and therefore the lower the amount of CIL. In effect, it would be on a sliding scale depending on how much social housing there is in the development, so there would be no encouragement for any house builder not to proceed with a scheme on the grounds that because of CIL it cannot afford to produce as much social housing and affordable housing as it could before. It removes that excuse and allows schemes to proceed. All schemes would be covered; small ones as well as larger ones covered by partnerships under Section 106 which deals with housebuilders. They would all be covered and no CIL would be payable on social housing if Amendment No. 134 is accepted. Amendment No. 151 comes at this from a slightly different angle. It looks at schemes where there is a deal with a developer, a Section 106 agreement. Some 74 per cent of all social housing last year was secured through this technique of piggybacking on the work done by housebuilders, although since housebuilders are now doing so much less, that figure is in decline. This amendment ensures that the percentage—the quota—of social housing in Section 106 agreement deals will not be reduced because CIL is being charged on the developer. It gives priority to the social housing element. If that means that the scheme does not stack up with the addition of the payment of CIL at £10,000, or whatever it is, per home, the social housing does not take the hit. A reduction in CIL has to bear the consequences of that extra charge. CIL would have to be reduced, but the percentage of affordable housing would not be reduced. However, each site is different. The circumstances of each piece of land mean that a negotiation would be necessary to see whether CIL has tipped the scheme over the line of viability. I have dealt with sites where we have discovered methane gas, which required all kinds of extra work later on, and where we have had basements that we did not know were there, which added extra cost. I have had to deal with the great crested newt single-handedly in armed combat. There are archaeological finds all around York that hold schemes up interminably. In all those cases, the fee would go up. We can no longer afford either to produce more affordable housing or pay CIL on top of the other costs that we face. If my amendment is accepted, CIL would always take the strain, but it would require negotiations in each case. It is a messy arrangement. Of course, local authorities might decide, particularly in the present financial climate, not to risk losing social housing and affordable housing and not to levy CIL at all. That might be an option for them, but that could be throwing the baby out with the bathwater since CIL is there to raise money for infrastructure, and we may well need that funding. I think, but I am not sure, that local authorities could charge differential rates according to how much social housing and affordable housing is delivered; so less CIL if a developer produces 50 per cent affordable housing and more CIL if it produces only 25 per cent. Again, that does not have the advantages of a clean, clear exemption, so I prefer my first amendment which, in effect, treats all social housing as defined by Section 68 of the Housing and Regeneration Act as if it were a charitable endeavour, which it clearly is. It legally is for some, but not for all, housing associations. That brings me to a critical issue and a critical question about the relationship between social housing, which is what my amendments are about, and developments by charities for charitable purposes, which the Minister has tabled an amendment to cover and which is of much interest to many other Members of your Lordships' House. Will all the provision of social housing by housing associations that are legally charities be exempt in any case, so that Amendment No. 134 is not necessary for charitable housing associations? About 70 per cent of all housing associations are charities, although probably only 50 per cent of the output comes from those housing associations. Are we safe in relying on the charitable exemption for at least half of the housing, or are we safe for the whole lot? Will all the provision of social housing by housing associations, by those that are charitable and by those that are not registered as charities, but which are producing identical homes for exactly the same people with the same needs as charitable housing associations—activity which is by definition, being used for a charitable purpose, as it is being done in the same way by charities elsewhere—be covered by the exemption for charitable purposes? If we have to draw a distinction between housing associations that are charities and those that are not, we get into extremely murky territory. Will housebuilders have to choose to work only with the charitable housing associations to keep CIL down? Will local authorities trying to raise reasonable sums of CIL have to work only with the non-charitable housing associations, which will have to pay CIL? Will the Government have to pay extra social housing grant to the non-charitable housing associations so that there is a level playing field between organisations doing identical things but with different constitutions? Your Lordships would not be able to distinguish between housing associations that are charities and those that are not, because it is often for purely historic reasons that they have chosen in their constitution whether to be a charity. Drawing those lines will create all kinds of difficulties. Will all social housing be deemed to be outside CIL, if and when the Minister’s amendments on charities and charitable purposes are carried? I can think of no greater charitable purpose than housing the homeless. I very much hope that all social housing will be covered by the amendments that follow and that my amendments will be deemed redundant. Nevertheless, until I am assured that that is the case, I beg to move.