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English Devolution and Community Empowerment Bill

My Lords, development corporations will be the chosen vehicle for the delivery of the new generation of new towns. I was delighted to hear today the Housing Minister, Matthew Pennycook, announcing a consultation on the details of creating a development corporation for greater Cambridge. This model can be used far more widely, for other developments and area regeneration as well. But my worry is that this does not happen elsewhere, that new development corporations do not appear and that this part of the Bill—unless amended by Amendment 133—turns out to be a damp squib. Mayors and combined authorities have other important matters to handle and may fail to take advantage of the opportunity presented by the Bill to create the development corporations that really can achieve more and better new homes and communities.

Amendment 133 is intended to enable government to engage with the strategic authorities to incentivise and support the setting up of development corporations and sometimes to provide them with financial assistance, perhaps via Homes England, as well as ongoing advice on their governance, on land acquisition—including through compulsory purchase—on the creation of the masterplan and on the subsequent oversight of the management of the new development. The measures in this amendment could help to radically change the way housing and infrastructure are currently delivered. Publicly accountable bodies empowered to work for the common good could dramatically improve the speed of build-out, ensure more affordable homes and achieve the benefits of great place-making for the communities destined to live there.

Amendments 240 and 242 in my name have been grouped with my amendment on development corporations. These two additional amendments would insert a new clause with the heading

“Duty to optimise the use of public land”.

The amendments attempt to ensure that the precious asset of land owned by local authorities, including strategic authorities and development corporations, is put to best—“optimal”—use. The amendments seek to resolve long-standing complexities and arguments over the treatment of land holdings by public bodies. I pay tribute to the land economist, Stephen Hill, supported by leading real estate experts and a large number of public interest institutions, for his help in preparing these two amendments.

The amendments address the barrier of land prices being too high to allow for new developments to embrace important social purposes. The amendments

would bring down the value of land by requiring public bodies to make available their own land holdings and redundant buildings on terms that make possible their best use. They would have to follow the 2018 principle of law set out by Mr Justice Holgate, which holds that true market value must reflect compliance with public policy. So this amendment would ensure that the market value of land must take account of the cost of abiding by the obligations both set out in the local plan and contained in central government’s requirements. Local authorities would have a duty to create a land use management plan for sites in their ownership to ensure that developments are ultimately for the public good.

Since the duty to optimise the use of public land would very often be of relevance when it is planned to dispose of land to others, the amendment also provides clarification on the meaning of the phrase “best consideration reasonably obtainable”, which governs the sale of publicly owned land at present. Public bodies believe that this means that they must accept the highest price offered, irrespective of the effects of this on their local community. Taking this line can prevent efforts to improve the quality of life for local citizens for generations to come.

I will illustrate this by reference to negotiations in which I was involved to acquire a redundant hospital building for an extra care housing development for older people. This use of the old building and surrounding land would provide a service that meant substantial annual savings for the NHS and care services as a result of the housing with care provision. But the NHS trust was adamant that the sale must be to the highest bidder—in this case to a developer of luxury flats, principally for overseas buyers, forfeiting the gains to the community in return for a short-term financial receipt.

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The amendments clarify that the public duty is to secure the optimal use of land, not the highest price offered. They do this by defining optimal use and interpreting best consideration by reference to the requirements on the use of the land contained in the local development plan and the relevant national development management policies, as well as being in accordance with environmental principles in the Environment Act 2021. Because securing the optimal use of public land in this way would mean that the value of the land was legitimately constrained, it becomes feasible to develop a site to incorporate economic, social and environmental gains. That is the essence of land value capture: it transforms the viability of great place-making.

The amendments would bring into play thousands of publicly owned sites, large and small, on terms that make possible the good land uses that local communities need and deserve. When I raised this same issue in debates on the then Levelling-up and Regeneration Bill, the noble Baroness who is now the Minister, who was then on the Opposition Benches, expressed support for my amendment. I hope she still feels that way. I beg to move.