I move amendment No. 14:
In page 6, line 1, to delete paragraph (a) and substitute the following:
"(a) the First Schedule in respect of a reduction in the value of an interest in land,".
Local Government (Planning and Development) (No. 2) Bill, 1988: Committee Stage (Resumed).
SECTION 6.
Amendment agreed to.
Amendment No. 1 in the name of Deputy Gilmore to amendment No. 14 has already been discussed. Is Deputy Gilmore going to move his amendment?
I will not move it in view of the commitment given by the Minister to consider the method of calculating compensation before Report Stage.
Amendment No. 1 to amendment No. 14 not moved.
I move amendment No. 15:
In page 6, paragraph (b), line 3, to delete "award" and substitute "award, and".
Amendment agreed to.
I move amendment No. 16:
In page 6, between lines 3 and 4, to insert the following paragraph:
"(c) the application of the First Schedule to a claim for compensation under Part IV for a reduction in the value of an interest as if a reference to `the relevant decision under Part IV of the Principal Act' or to the `said decision' was, in relation to each of the sections in that Part mentioned in Column A of the Table to this section, a reference to the matter set out in Column B of that Table opposite the reference in Column A thereof to that section.
TABLE
|
Column A |
|
|
Section |
Column B |
|
18 |
the removal or alteration of a structure consequent upon a notice under section 36 of the Principal Act. |
|
19 |
the discontinuance, or the compliance with conditions on the continuance, of the use of land consequent upon a notice under section 37 of the Principal Act. |
|
20 |
the removal or alteration of a hedge consequent upon a notice under section 44 of the Principal Act. |
|
21 |
the refusal of consent required under an order under section 45 of the Principal Act, or the grant of such a consent subject to conditions. |
|
22 |
the making by the planning authority of an order under section 48 of the Principal Act creating the public right of way. |
|
24 |
the action of the planning authority pursuant to section 85 of the Principal Act. |
Amendments Nos. 1 and 2 to amendment No. 16 not moved.
Amendment agreed to.
Question proposed: "That section 6, as amended, stand part of the Bill".
Since section 6 may have some impact on the operation of the First Schedule, I want to let the House know that I may want to come back on Report Stage in so far as the First Schedule may affect an amendment of section 6 retrospectively. I should like the record of the House to show I made that intervention.
The Deputy's intervention will be noted.
Question put and agreed to.
SECTION 7.
I move amendment No. 17:
In page 6, between lines 14 and 15, to insert the following paragraph:
"(d) the form of notice to be served under section 14,".
Section 7 deals with the regulations which the Minister may make under the Bill. Section 14 deals with situations where local authorities can offset any claim for compensation by giving an undertaking that permission may be given to a development of a different kind. I do not see anywhere in the Bill a provision under which section 14 notices might be served or any regulations which would govern that. I believe this is the appropriate section under which to empower the Minister to make regulations setting out the form of notice under which section 14 notices would be served.
The Deputy is correct in identifying the need to permit regulations in relation to the form of notice under section 14. This notice would be one indication that land is capable of other developments for which planning permission ought to be granted. However, section 14 already takes cognisance of this point and refers to the notice being served in such form as may be prescribed. By virtue of the provisions in section 1 (3) of this Bill, section 2 of the 1963 Act, the interpretation section, applies also to this Bill. This defines the term "prescribed" as meaning prescribed by regulations made by the Minister.
Amendment, by leave, withdrawn.
Question proposed: "That section 7 stand part of the Bill".
I should like to put on record my concern in relation to the capacity of the Department of the Environment to produce regulations which would give considerable substance to the intent of legislation and a delay in that capacity by the failure to have the proper, effective or conclusive consultation with the relevant bodies involved. In this instance — it will rise also in regard to the details of the First Schedule — since we are specifically talking about the form of compensation and disputes as to the value of that compensation, for example, the antecedent value, the actual loss incurred, etc., the way in which the professions are facilitated in giving effect to this legislation will be determined by regulations written long after this House, the other House, or indeed the third House — that is, the office of An tUachtarán — have enacted the Bill. I should like the Minister to put on the record — so that he is not unnecessarily embarrassed in a year and a half's time by questions similar to those which might be asked in regard to the Multistorey Dwellings Act — that there will not be a delay in the operation of the Bill because of a difficulty about agreement in regard to the forms which are required under regulations.
I agree with Deputy Quinn that we should get on with this Bill. That was the intention in agreeing earlier to Deputy Shatter's amendment about the bringing of the legislation into effect as soon as possible. It is interesting to note that the question of valuation rules will not require the making of regulations. It is useful to remember this in order to put the Deputy's point in perspective. This is set out in the First Schedule, so the point the Deputy made in this regard is accommodated in this legislation.
I appreciate the point the Minister made. The rules in relation to how valuation is calculated are one thing — they are quite clear and are set out in the First Schedule, and we will deal with this when we come to it — but the precise form in which claims for compensation are to be made is another matter. I should like to be constructive in order to facilitate the speedy passage of this Bill through the House today. There is no reason, in principle, why we cannot finish Committee Stage today.
It is a procedural matter. Because of what we agreed here this day week in regard to bringing the legislation into effect it necessarily means that I cannot delay when it comes to the format of claims.
I appreciate that the Minister cannot delay but I am anxious to ensure that the final form of the regulations will be operated by a relatively small number of people. In all probability a claim will be served in the first instance on the relevant local authority either by a solicitor or a valuer. The form of that compensation claim and the way it is set out by regulation would be critical to the way the compensation claim will be argued. If the relatively small number of people who will have to make this legislation are not satisfied or feel in some way inhibited by the format of the regulations and by the various forms, then our intention as legislators could be frustrated by the activities of civil servants. That is my point and I think the Minister knows the background to it.
That difficulty has arisen heretofore but the regulations will be made speedily. They may need to be modified subsequently but that will be a matter for discussion then.
Question put and agreed to.
SECTION 8.
Amendment No. 72 is related to amendment No. 18. I propose, therefore, with the agreement of the House to take amendments Nos. 18 and 72 together for discussion purposes. Is that agreed? Agreed.
I move amendment No. 18.
In page 6, between lines 28 and 29, to insert the following subsection:
"(2) No person shall be entitled to compensation in cases where permission for the alteration or removal of a structure is refused or is granted subject to conditions and where the said structure is protected under the National Monuments Acts, 1934 to 1987, and where the payment of compensation is precluded under those Acts.".
One of the principles which the Minister has set out for this Bill is that where compensation is precluded under another Act it should not be payable under this Bill and there should be no question of any second bite at compensation. As we know, compensation is specifically precluded under the National Monuments Acts in certain cases and it is desirable that it should be expressly written into this Bill that where compensation is precluded under the National Monuments Acts, it should not be possible to obtain compensation under this legislation. That is the intention of my amendment.
The quick answer is that there will be no double payments, even in cases where compensation might be payable under the terms of different legislation. I think that is what the Deputy is trying to ensure. Amendment No. 72 proposes that development may be refused without compensation on the grounds that it would injure or interfere with a historic monument, either formally entered in the Register of Historical Monuments or situated near a designated archaeological area. The 1963 Planning Act already gives non-compensatable status to conditions imposed to preserve archaeological features and objects regardless of whether these are formally recognised under the National Monuments Acts. This provision is retained in paragraph 17 of the Fourth Schedule. However up to now a refusal, as distinct from conditioning, of planning permission to preserve archaeological features has not been of itself a non-compensatable reason. Amendment No. 72 will remedy this. The Deputy's amendment has much the same purpose which will be achieved by the Fourth Schedule and amendment No. 72. I prefer amendment No. 72 as it is more precisely related to the conservation arrangements provided for under the National Monuments Acts, 1934 and 1987.
My amendment is not solely concerned with cases where compensation is precluded under the National Monuments Acts.
No compensation is payable under the National Monuments Acts.
That is the point I am making. Would the Minister confirm that in cases where permission is refused subject to the conditions under the National Monuments Acts, no compensation will be payable?
That is understood. The Fourth Schedule and my amendment cover that matter.
Amendment, by leave, withdrawn.
Section 8 agreed to.
SECTION 9.
Amendment No. 19 is out of order in so far as it is regarded as not being relevant.
I accept unreservedly the ruling of the Chair. I would like to indicate — perhaps I will consult with the Minister's office — that although an amendment along the lines suggested is clearly out of order because of the stated ground rules of this House, I suspect an amendment which would refer to compensation as not being payable would be in order. I would like to give notice that on Report Stage I will attempt to bring in an additional section which will fit within the confines of this Bill.
Amendment No. 19 not moved.
Section 9 agreed to.
SECTION 10.
I move amendment No. 20:
In page 7, subsection (1), line 3, to delete "this Act" and substitute "Part III".
This amendment is designed to make the section more internally consistent as well as to reflect more accurately the provisions of section 72 of the 1963 Act which this section substantially restates. It is clear from the body of section 10 (1) that a compensation statement is to be prepared only in cases involving a refusal, conditioning, revocation or modification of planning permission. However, the preamble to subsection (1) carries a wider reference to any claim for compensation under this Bill. This will include the several unusual categories of compensation claims provided for by Part IV of the Bill as well as the more standard class arising from the refusal of permission and so on, which are dealt with in Part IV. It was not the intention, as the body of section 10 (1) makes clear, to include the less usual forms of compensation in this section any more than it was under the 1963 Act. The amendment will confirm the more limited application of the section.
Amendment agreed to.
I move amendment No. 21:
In page 7, subsection (1), line 7, after "conditions." to insert "or".
This is a drafting amendment which corrects an omission in the original text.
Amendment agreed to.
Section 10, as amended, agreed to.
SECTION 11.
We now come to amendment No. 22 in the name of the Minister. Amendment No. 23 is an alternative and amendments Nos. 26, 27 and 29 are related. Amendments Nos. 28 and 30 are regarded as consequential on amendment No. 29. I will say to Deputy Gilmore slowly what is proposed. It is proposed to take amendments Nos. 22, 23, 26, 27, 28, 29 and 30 together for the purposes of discussion. Separate questions may be put. Is that agreed? Agreed.
I move amendment No. 22:
In page 7, subsection (1), lines 18 to 20, to delete "has stood registered (whether under section 72 of the Principal Act or section 10 of this Act) for less than fourteen years, until such amount (if any)" and substitute "stands registered (whether under section 72 of the Principal Act or section 10 of this Act) until such amount".
These amendments are concerned mainly with providing a stricter and more clearcut application of the basic rule contained in section 11. Where compensation has been paid in respect of land no subsequent gainful development may be carried out on that land without repayment of the compensation to the planning authority. Section 11, as it stands, largely reenacts section 73 of the 1963 Act. This contains various qualifications of and exceptions to the basic rule I have just stated, some of them involving the exercise of discretion by the Minister for the Environment. The amendments now proposed will dispense with these qualifications and exceptions.
Amendment No. 22 will remove the 14-year limitation on the right of the planning authority to recover compensation. Instead, compensation will from now on be recoverable indefinitely upon subsequent gainful development of land. I understand that this is supported by Deputies Quinn and Gilmore who have tabled similar amendments.
Amendments No. 26, 27 and 29 will remove two discretionary powers from the Minister, the power to apply section 11 beyond the stated classes of development specified in section 14 (2) and the power to waive the clawback requirement in particular cases.
Amendments Nos. 28 and 30 are entirely consequential on these substantive amendments. These matters were raised by various Deputies on Second Stage who asked me to include them. I think they are now adequately covered by these new arrangements.
I wish to express my appreciation that the Minister in tidying up the section has accepted that there will be no time limit on the recovery of moneys paid by way of compensation in the event of subsequent development taking place on the land. The attachment of compensation to the land would remain irrespective of any change of ownership.
That is understood. It is attached to the land, not the owner.
Like Deputy Quinn, I welcome the Minister's amendment. The 14-year rule under the existing legislation on planning gave rise to much public concern. People could see, even though compensation was paid, that the entire process could be restarted after a period of 14 years. Even though the public may have paid out a very large sum of money, as they did in some cases which were referred to earlier in the debate, this did not commit the developer or landowner for all time and it was still open to them after a period of 14 years to come back and restart the process. I very much welcome the amendment which eliminates one area which has been the source of considerable public disquiet.
Amendment agreed to.
Amendment No. 23 not moved.
We now come to amendment No. 24. Amendment No. 31 is related. It is proposed therefore that we take amendments Nos. 24 and 31 together for discussion purposes. Is that agreed? Agreed.
Amendment No. 25 is also related.
It was not regarded as having the affinity which would put it in the box with the other two.
I move amendment No. 24:
In page 7, subsection (1), line 22, after "statement" to insert, together with interest,".
This amendment deals with the repayment of compensation to the local authority. I am seeking to ensure that if and when compensation is repaid to the local authority, it is repaid with interest. It seems that there is an anomalous situation at present. On the one hand, the payment of compensation by the local authority must be with interest where that payment is delayed for whatever reason. We have a practical example of that, the case of Grange Developments, where the compensation award had to be paid with interest which increased the total amount to about £2 million.
Recently Dublin County Council passed a material contravention motion the effect of which would be that a new development could take place on the same lands and in return for that the compensation which had been paid would be repaid to the county council. However, the repayment to the country council would be without interest and, under the agreement being entered, would, as I understand it, be paid on a phased basis related to the development of the site. In this case the new planning application for the Montgorry lands is for 508 houses. That development could take place over a protracted period of time. The compensation, therefore, may well lose its value over that period of time. It could be seven or eight years before the development is completed and before Dublin County Council would receive the last instalment of the repayment of the compensation. In that situation Dublin County Council would be at the loss of the interest which would have accrued on the amount of compensation in the first place. The irony is that they would be at the loss of that interest having already had to pay interest on the compensation in the first place. That anomaly should be eliminated in the legislation. It should be quite clear that where compensation is to be repaid to the State it should be repaid with interest.
Amendment No. 24 proposes to add interest to the amount of planning compensation to be repaid under the section upon subsequent redevelopment of land in respect of which compensation has been paid. Section 11 already provides for payment of interest, in subsection (7), but only in the context of permitting the developer to discharge his liability to the planning authority in instalments. In other words, they can get interest if the compensation is paid in instalments. In strict justice, the amendment is warranted; but previous amendments have already strengthened section 11 considerably. From a practical point of view, I would be concerned that this amendment on top of the other amendments could create a situation where we, the legislators, would be ensuring the permanent sterilisation of certain lands regardless of future planning merits. The section is strong enough as it is. To put it bluntly, there is no interest on a lump sum, but when it is paid in instalments interest is permissible and available under existing law.
That does not quite meet what the amendment is seeking. I appreciate that in cases where the repayment is by instalments that the instalments will attract interest. That is an improvement, but it does not deal with the situation where the first payment might not be for several years after the payment of the compensation in the first case. Let us say that a local authority pay out compensation in 1990 and the proposed development does not actually take place until the year 2000. Will the ten-year interval be taken account of in calculating interest? As I understand it, the Minister is saying it would not, that all that would happen in that situation is that the second payment would attract interest over the year between the first and second payment. There could, in that situation, be a very considerable loss to the local authority which would have paid out money and be unable to recover the real value of the money. If the Minister's best prognosis for the economy is borne out it may not be an enormous problem over the next year or two; but if inflation were to resume at a level that we have known it to be, then it would be a very considerable problem. If interest rates rise as expected there would be a very considerable loss to the local authority concerned.
There is an issue here and the issue is that the full amount should be repaid with interest. The principle of repayment is correct. If the local authority pay out compensation for a plot of ground where there is a refusal of planning permission and development is subsequently allowed on that, the principle of repaying the compensation is absolutely correct. This principle, however, is very substantially undermined if the repayment is without interest because what is repaid to the local authority might bear little relation to the real value of what the local authority had to pay out in the first place.
I take the Deputy's point, but we think this will not arise ever again, so it is a hypotechical situation. On the other hand, the local authority may get nothing at all if nobody seeks planning permission for development on that piece of ground. That transaction would, therefore, be finished. We are talking about a new set of circumstances and it may very well be that the developer or subsequent developers, after a change of ownership, could have disposed of that money in some other way and are not in a position to go on with the development even though the development was desirable under a new change of attitude on the part of the planning authority in regard to zoning or whatever. We thought about this for a long time and about the equity of the thing to all sides. If somebody wants to phase in repayments they will have to pay interest on it from day one; there is no argument there. We felt, however, that if it is repaid in a straight lump sum some years down the road or whatever, all we could ask for was that. I had some difficulty myself with this for a while but having thought about it I consider that this is the most equitable way of doing it.
Let us be clear about what we are saying. There is a touch here of what is sauce for the goose not necessarily being sauce for the gander. That was Deputy Gilmore's concern. We are talking about a situation where a person owns land, applies for planning permission and is refused it for some reason that is compensatable, and gets money related to the actual loss incurred or based on some calculation of the additional value of the property had planning permission been granted. At all times they retain ownership and use of the property. They also get a sum of money paid in a lump sum to compensate them for that loss of additional value which, under the law of the land, they would have been refused permission by the local authority because the local authority considered that a development of that nature should not occur at that time. That person takes that lump sum and invests it, and it attracts interest and has the capacity to increase in value if put to prudent use.
Or it goes down.
Or it goes down. If you bank it in formal terms, in Government gilts for example, and if the rate of interest is higher than the rate of inflation it maintains its value at worst, and will possibly increase. If at some future date there is a change in the development plan and in arrangements generally, for example, the designated area is extended to that area, and that person now wants to develop and we have removed the 14-year prohibition in relation to it, it is not unreasonable to say the person was compensated in the past, he got a lump sum of a certain amount and in order to release this land back into the development area it has now a charge on it which is the amount of the compensation plus interest.
The intent of Deputy Gilmore's amendment is to give some adjustment to historic values to bring them up to contemporary values. He has not prescribed current interest rates or prevailing interest rates. The interest could be negotiated. The rate of interest to be applied does not necessarily have to be the prevailing bank rate interest or the interest rate that would be used retrospectively if we were in arbitration at present. What is being asked here is an admission of principle. The Minister in his first intervention indicated that in subsection (7) of this section he felt this area had been covered somewhat. Perhaps that was inadvertently misleading.
No, I said only in so far as instalments are concerned.
But only instalments from a particular time.
That is right.
It is not necessarily the same thing. This is complex and I do not want to attribute wrong motives to anybody. If somebody owns property and wants to add to its value by way of a planning permission, and is refused that planning permission by the local community through the local authority because in their wisdom they have decided in the greater interest not to grant that planning permission and to compensate that person by way of cash, if at some stage in the future the person is given planning permission to develop and add to the value of that property, the person should be required to pay back some form of interest.
In considering it I was arguing in that direction. Only taking the totality of equity a situation could arise where somebody was compensated for the ground and through no fault of their own invested the money the wrong way and because of the desirability in the opinion of the planning authority to have the land developed that person would not then be in a position to accommodate the demand if it included the interest. I thought the person would certainly have to pay back what they had got but adding the extra could very well sterilise it. It is a narrow point but I want to cover it in total equity to every situation that might arise. For that reason I found it difficult to write it in to cover the point the Deputy made. However, I went along with the Deputy when I said that in strict justice the amendment was warranted. I put that on the record. I wanted the Deputy to leave it at that. I was sympathetic to the view but I could see circumstances where it might not achieve the equity one would expect in fair play.
The issue Deputy Gilmore has raised I raised in Dublin County Council when we had the recent planning application before us in respect of the lands for which Grange Developments had been in receipt of £2 million. The Minister can correct me if I am wrong. The problem we had in Dublin County Council was apparently that the manager, on foot of a planning permission that was being granted by, in effect, the support of the Fianna Fáil majority group on the council, was taking the view that instead of requiring the entire £2 million to be paid back before development commenced, he would allow it to be paid on some unspecified instalment basis without interest attaching. Under the current law it seemed he could not attach interest if he was agreeing instalments. The developers purchased this land from Grange Developments, no doubt at a discount because of the planning difficulties they were going to experience but, no doubt, also aware they were going to have to pay out £2 million if they got a planning permission, which I believe they should not have got; they have got it now and so be it although An Bord Pleanála may take a different view. It seemed ludicrous that, when the council had paid out interest on the original amount, public funds of £2 million could continue to be retained over an extended time after the permission was granted, the permission being granted automatically increasing the value of the land and possibly allowing the developers to simply sell on the land without building a single house on it. If you were going to agree to an instalment basis system and that interest should be imposed, my view was that if the local authority were going to grant the planning permission the best approach would be for them to indicate that the planning permission would be forthcoming, having decided that it would be, planning wise, a correct decision, but the formal written grant of permission would issue only after the full compensation was repaid. Because of the possibility of the simple sell on of lands at increased values that should be considered. I am happy that the Minister has incorporated the interest provision here in the context of instalments.
I have mixed views about the debate that has been taking place about this matter. My gut reaction is that a potential developer has received compensation, the accumulated interest should be paid back to the local authority, but I am conscious that the circumstances under which compensation awards should be made under this legislation is far more limited than has been the case up to now. I was one of the people who advocated getting rid of this 14 year provision whereby no compensation was to be paid back 14 years and one month after the original decision was made. That seemed equally ludicrous.
I am concerned with what Deputy Gilmore is saying. Let us assume for a minute that we have a piece of land in respect of which some compensation is properly paid under the new legislation and about which none of us can raise a great issue because it appears justified that compensation is paid. Let us assume that planning wise 30 years later there has been a very considerable change that indicates that it would be appropriate to grant a planning permission to do something in that piece of land that heretofore could not be undertaken. If we attach interest to the compensation repayment, having removed the 14 year bar, the amount of compensation that might have to be repaid — I think one of these amendments refers to the current rate of judgment mortgages which is 11 per cent, and I am open to correction on that — could be so much away outside the values of those lands that you really would freeze the land.
There is a problem here. What goes against the grain is the idea that a local authority might lay out money and maybe two or three years later grant a permission and not be able to recoup interest. I can see that in different circumstances two or three decades later it would be inequitable to impose an interest requirement. I am wondering whether there is a midway between, whereby if within a limited specified period a planning permission was granted the interest would be recoupable whether the repayment was made as a lump sum or on an instalment basis. If you go beyond an extremely long time, there could hardly be a question of people tricking around with a planning process. It is difficult to envisage someone making a compensatory claim today in the expectation of bringing off a planning coup in 25 years' time. Nobody operates on that basis. Is there a middle course that the Minister might consider?
I was trying to indicate time scales.
I appreciate that.
We are trying to take them out successively. I am glad we will not have to go down that road. It was purely a matter of equity for certain individuals. Deputy Shatter has mentioned a few. In the new circumstances where compensation can be paid at all it is really in the case of down-zoning which is deliberately done for a specific purpose of the planning authority. We all agree that people should get compensation in those circumstances. It will have to be something which the planning authority themselves will alter in five, ten, or 50 year's time. I would have liked to accommodate them in some way, but how is this to be done unless it is pegged to some index? This might mean megabucks and might sterilise a development the planning authority would be demanding. I did not want to get into any hassle by providing that if a person carried out a development within ten years, he would have to pay 8 per cent. I was sympathetic towards the notion if it could be confined, but I decided it would not be fair when one considers the doubling or trebling of the original compensation over many years and the demand of the local authority to change the zoning to accommodate their planning purposes.
I was beginning to hope earlier that the Minister was somewhat favourably disposed towards the idea but for some reason had decided not to accept the amendment. His opinion is beginning to harden against the amendment as the discussion goes on. I am not sure that I share his concern. I see the point if the development does not take place for 30 years and the land is frozen, but that is such a remote possibility that to reject the amendment on that ground alone is stretching things a little too far, particularly when the local authority have a certain amount of discretion in the matter. If in 30 year's time a development becomes so desirable that the local authority agree it should go ahead, there are certain options open to the local authority that could accommodate the situation.
The fundamental problem is that as things stand the local authority pay out compensation with interest. The Grange Developments award attracted interest of between £200,000 and £300,000. If there is a delay in payment, the local authority must pay interest as well but where a development is to go ahead, permission is granted and the amount is to be repaid to the local authority, the only amount repayable is the original sum, regardless of the intervening years, and interest will only arise if it is paid on an instalment basis. When the local authority pay out money it is paid from funds they could use for the improvement of their area and the provision of services. If they are repaid their money 30 years later, the amount will be so small in relation to what they have paid out in real terms that it completely negatives the purpose of this section and the principle of repayment. I do not understand some of the logic.
During the course of the lively debate on the question of the way in which compensation should be calculated, I made the point that it should be calculated on an actual loss basis. The Minister stated that the compensation would be attached to the land and that the circumstances of the landowner would not be taken into account. We must be consistent. If that is the case and the local authority pay out a certain amount of money for land, presumably the landowner will use that money. I do not know very many developers who stuff money into a mattress.
He is not mandated to do it.
We can take it the money will be used and will grow over a period of time.
Not necessarily. When I became Minister for the Environment it had not grown much in the preceding eight years for people who were involved in construction or development. I am trying to be facetious.
The Minister is putting himself in the same category as Neptune — a land-based Neptune.
He can consistently blow. Politicians do not have the P² qualification that Neptune has.
I would remind the Minister of who has been benefiting by development while there are people who still cannot house themselves. The Minister should not exaggerate the extent of development that has taken place under his stewardship.
He is just huffing and puffing about it.
I was also going to say something about blowing, but I did not want to be offensive.
The Deputy is a very strictly mandated man.
I have the people's mandate, as we all have. On the question of interest, with which the Minister seems to have a certain degree of familiarity, there is no justification for leaving a period of time within which interest would not be repaid to the local authority. That is inequitable. The local authority have to pay the interest. When the money is being repaid the landowner or developer should repay the original sum with interest. If that does not happen, the purpose of the section will be severely undermined.
I have made my point and Deputy Shatter agreed with me to some degree. There is no point in arguing it any further. I am asking the Deputy to withdraw the amendment.
I will not withdraw the amendment.
Amendment put and declared lost.
I move amendment No.25:
In page 7, between lines 23 and 24, to insert the following subsection:
"(2) Where the planning authority decide under section 26 of the Principal Act to grant a permission they shall not make the grant until such amount (if any) as is recoverable under this section in respect of the compensation specified in the statement, together with interest, has been paid or secured to the satisfaction of the planning authority.".
This amendment refers to the issue we were talking about, the question of the money being repaid with interest. It also provides that permission should not be granted until the local authority has secured the repayment. There is a danger against which the Bill must provide, although I accept that the likelihood of this arising would be remote. We spent a long time this morning talking about strange happenings in the area of planning. We have to protect against a situation whereby a local authority would grant a planning permission and not have secured the repayment of the compensation which is due to them. That needs to be provided for in the Bill and that is the purpose of this amendment.
The position up to now, which is contained in section 11, has been that compensation is recoverable not just when a new planning permission is granted but when development is carried out on the relevant land. There is a good deal of logic in the provision. It provides that any planning application would be dealt with on the planning merits but ensures that as soon as development is to be undertaken the planning authority would be legally empowered to recover the compensation.
The amendment is based on the distinction in section 26 (9) of the 1963 Act between a decision to grant permission and the actual granting of permission. The main purpose of this distinction is to put on hold proposed planning permissions by planning authorities pending the expiry of the period for the taking of the planning appeal. In the case of An Bord Pleanála the distinction is a fairly nominal one since they are required to make the grant permission as soon as possible after the decision to grant. This amendment would be technically defective in that it does not deal with decisions by An Bord Pleanála. I cannot see that the amendment is necessary. If, because of changed circumstances, a planning authority wished to grant planning permission for land, as long as compensation is clearly recoverable upon development the question as to who pays the compensation should not be an issue. After all, the person who benefited from the original compensation may have died, emigrated or long since sold the land. The amendment would deprive a planning applicant of the flexibility of obtaining his full planning permission first and then negotiating with financiers or other developers about the implementation of that planning permission which would of course involve repayment of the compensation. I see no particular advantage to the amendment and I recommend that the Deputy withdraw it.
I would like the Minister to respond to a matter I raised during the course of the last amendment. We all assume that a compensation repayment will be triggered by the commencement of a development. I raised a different issue, that in reality, even within the confines of the new legislation, someone may look for a planning permission, let us say for land that was originally residential and was then used for agricultural zoning. The owner received compensation and ten years later he looks for planning permission to build a house and is given that permission, thus increasing the value of the land. If permission was given to build 20, 30 or 40 houses on a large piece of land, as opposed to a site, it would increase very substantially the value of the land.
If I get such permission I may decide that I do not want to develop the land. I now have land worth, say, £100,000 in agricultural values, I sell it for £500,000 without commencing any development and the person to whom I sell it may have to make a repayment under this legislation. To take the point that was made a few minutes ago, interest is not accumulating on that money. I have made my profit and have gone off the scene. I am raising this matter because, if the Minister is not willing to consider it we may want to do something about it. It seems to make sense to have a clause in this legislation to provide that where planning permission has been granted in these circumstances, which results in an increase in the value of the land, and the person who gets the planning permission then sells the land at the increased value, the compensation that has to be repaid should be paid at the time of the sell on and not at the time of the start of the development.
I expressed concern previously about freezing land if it was held for 20 or 30 years. The public purse should not be at a loss for an ongoing situation where a profit has been made from a planning permission granted and the trigger of repaying compensation is not set off until the development starts. If you sell off the piece of land without starting the development it makes a lot of sense that you trigger the repayment at that stage.
That is a neat point. I think the Deputy will agree that the compensation is recoverable anyway.
Yes.
No development can take place until the compensation is paid. The Deputy is quite right in that the granting of planning permission does not necessarily mean that development is going to take place.
There might be a sell on and people will make a profit from selling the land as a site with planning permission.
Yes, but no matter how long that process goes on compensation is still recoverable. Why not let the market forces dictate the pace rather than——
Because in that situation the local authority would be at the loss. The people sell the land and make a profit but the local authority cannot recoup the money. There is no interest provision being triggered either. I am suggesting that the Minister consider this matter for Report Stage. I accept this is more of a major problem under our current laws. With the more limited compensation arrangements under the new Bill, this may not in reality become a problem.
I do not think it will be a problem. The Deputy has made a good point but I am inclined to think that there is an inevitability of work taking place when you start moving on and selling land. This is usually the purpose of the sale, so that the next person can do the job.
If a substantial profit has been made why should the local authority wait perhaps two years before the development starts?
The Deputy is quite right; the local authority should not be at the loss. I am advised that the profit is taxable under development land tax arrangements.
That is no consolation to the local authority.
No, but it is consolation to the State. That is a good point but I would still like to put to the Deputy——
It will be a very sore point if this Government stay in power, given the reduction to local authorities.
The Deputy is one of the few who recognised, in his normally generous way, that the Minister for the Environment had succeeded in difficult times in getting an increase in the kind of support grants available for local authorities.
We have not seen it in Dublin.
Yes, you have. If the Deputy was here during the years when I was taking money from some local authorities to spread it out among those who did not have enough to keep going, he would know how generous I was in staying my hand in the Estimates for 1990 but we will not go into that now. I see no difficulty in this regard but I will look at the matter.
There is an inconsistency between what is being said here today and what was said the last day. We had a long debate then about the distinction between the concept of reduction in value and actual loss and how compensation should be calculated. The point was made very forcibly by the Minister that a refusal of planning permission reduces the value of a property. Today he seems to be taking a different approach entirely. He seems to be saying that the land owner does not recover that reduction in value until development takes place. It is at that point that he repays the compensation to the local authority even though a repayment would not now be with interest. I do not follow the logic of that. If a planning refusal reduced the value of property, then planning permission at some later stage should correspondingly increase the value of the property. Property is not sold for the purposes of development but for speculative purposes. One site in my constituency, bought for £5 million, was sold recently for £10 million without any development having taking place. The argument which seems to be being made is that the unfortunate owner of the property who has just got planning permission is not in a position to repay the local authority the compensation already paid out on that land until such time as development takes place, but that is not consistent with what the Minister said the last day. We are in grave danger of tilting the balance here in favour of the property owner.
This Bill is seeking to strike a balance between the common good and the ownership of property. In relation to the question of interest and at what point the compensation should be repaid, we are being invited to pity the unfortunate property owner who might not be in a position to pay the compensation until development has taken place. It is important that the provisions in this Bill are consistent. If a refusal of planning permission reduces the value of property, a grant of planning permission increases the property value. If the property is then to be sold on it is sold with planning permission, it is at the point where the grant is made that the compensation should be repaid.
Another danger is that if the compensation is not repaid at that stage, and if it is not tied to the granting of permission, an unscrupulous property owner might decide not to pay the local authority. The provisions of the Bill are clear in that the local authority can recover the money but in this instance a local authority might have to take someone to court, involving a lot of expense, in order to recover what is theirs in the first place. I do not understand the Minister's difficulty with this and I hope he will have another look at it, in which case I am prepared to withdraw the amendment until Report Stage.
In fairness to the House if I am not going to consider this seriously I cannot say I will look at it before Report Stage. We must not confuse ownership transactions with this matter as they are not relevant to this legislation at all.
They were when we were talking about interest a few minutes ago.
The Deputy is entitled to give an example about someone selling on land but he should not try to make it relevant to this Bill because in the strict circumstances it is not related to the legislation. We are talking about the land and not the owner and what he might or might now do in subsequent transactions. There will be no loss to the local authority as compensation cannot be paid twice. I see what the Deputy is getting at but he has not convinced me to look at it again.
Is the Deputy pressing the amendment?
Yes.
I have a problem with this which perhaps the Minister could clarify. There was an interaction between this amendment and amendment No. 24 but the Chair in his wisdom decided that they should be treated separately. There is a provision in this which requires interest payments and that provision would now be inconsistent with subsection (1), as this House has not been successful in incorporating amendment No. 24 into the Bill.
It is amendment No. 31 that clarifies the rate of interest payble, that is, in a case where the repayment of compensation is not paid in a single lump sum. The 1963 Act providing for such cases where repayment should be made as a series of instalments of capital and interest combined, did not specify the rate of interest. Amendment No. 31 provides that the rate will be the same as that which is periodically fixed by order of the Courts Act, 1981. They treated that in the same way as judgment debts.
I find the wording of the amendment deficient in relation to the idea that a grant of permission would not be made until such compensation was recovered. If the property was up for sale subject to planning permission one could be in a catch 22 situation. If Deputy Gilmore wanted to introduce this on Report Stage it would have to be a condition of a planning permission that the development could not commence until such time as the compensation was repaid. If the amendment were to say that the grant of permission could not be made by the planning authority, not even by An Bord Pleanála, that would be impractical, but one could make it a condition of the planning permission that development could not take place until such time as all compensation paid out previously had been repaid with or without interest. I can see a technical problem in relation to the wording. However, I have sympathy with the broad principles enunciated by Deputy Gilmore and the Minister has not convinced us of his position.
Amendment put and declared lost.
I move amendment No. 26:
In page 7, subsection (2), to delete lines 24 to 29 and substitute the following:
"(2) This section applies to any development (other than exempted development), being development of a kind specified in section 14 (2):".
Amendment agreed to.
I move amendment No. 27:
In page 7, subsection (2), to delete lines 31 to 36.
Amendment agreed to.
I move amendment No. 28:
In page 8, subsection (3), line 1, to delete "subsections (4) and (5)" and substitute "subsection (4)".
Amendment agreed to.
I move amendment No. 29:
In page 8, lines 37 to 48, to delete subsection (5).
Amendment agreed to.
I move amendment No. 30:
In page 8, subsection (6), lines 51 to 53, to delete ", except where, and to the extent that, payment of that amount has been remitted under the last preceding subsection,".
Amendment agreed to.
I move amendment No. 31:
In page 9, subsection (7) (a), line 6, after "combined" to insert "(the interest being determined at the same rate as for a judgment debt)".
Amendment agreed to.
Amendment No. 31a not moved.
Section 11, as amended, agreed to.
SECTION 12.
I move amendment No. 32:
In page 9, subsection (1), line 30, after "decision" to insert "by the Board, given on appeal,".
The purpose of this amendment is to ensure that the right to claim compensation does not arise until An Bord Pleanála have given their decision on a planning application. The idea behind that is that the applicant should be required to use the full planning procedure before being entitled to compensation. The effect of the amendment would be that the right to compensation would not arise until An Bord Pleanála had given their decision.
This amendment would cause trouble and clog up the system because it would limit compensation claims to planning decisions given by An Bord Pleanála. There are precedents for the proposal in the purchase notice provisions of section 29 of the 1963 Act which are limited to appeal decisions, and also to section 58 of the 1963 Act re-enacted by section 15 of this Bill which limits to appeal cases the Minister's discretionary powers to direct payment of compensation.
Despite the precedents I do not favour the amendment because its first effect would be to remove local planning decisions from all exposure to compensation. That would encourage unrealistic attitudes on the part of local planning authorities and divorce them from a proper realisation of the financial effects of their planning decisions. It could also lead to an increasing number of decisions being made at local level which would offer compensatable grounds.
Secondly, the amendment would make An Bord Pleanála the pressure point for all possible compensation cases. While, in practice, this may largely be the case at present, I do not see any merit in formalising this fact into a fixed legislative provision. The onus of coping with compensation in the context of planning decisions should rest equally with planning authorities and An Bord Pleanála. I ask the Deputy to consider that as reasonable.
If someone applies to the local authority for planning permission and is refused, as things stand he can claim compensation on the basis of that refusal. However, he has the right to appeal to An Bord Pleanála. I am simply seeking to require someone claiming compensation to pursue the planning application through the normal planning procedure right through to appeal, and that the right to compensation would only arise after the planning procedure had been exercised in full.
I do not see the Minister's point in regard to clogging the system. We have been debating the Committee Stage of this Bill for the last two days and we have been told that the cases of compensation which will arise as a result of this magnificent legislation will be so few that we have nothing to worry about. However, the Minister is now saying that there will be so many cases they will clog up the system of An Bord Pleanála if they are all processed. I do not understand that logic, although I concede that the Bill very considerably tightens the circumstances in which compensation would be likely to arise. Therefore, I am inclined to the view that the circumstances where appeals would go to An Bord Pleanála would not add extraordinarily to their work.
The State has provided a procedure for dealing with planning applications which includes an appeals mechanism. We are now talking about the payment of public money where there is a refusal for planning permission. I do not agree that public money should be paid out by way of compensation to anybody until the person has fully exhausted the procedure already there, including the appeals procedure, which has been established.
I do not understand the Minister's concern about the volume of appeals likely to go to An Bord Pleanála and I do not share his worry about local authorities. After all, we are talking about local authorities making decisions which would include compensatable reasons. Local authorities, by and large, have a very fine record of making very good planning permissions and, as we know to our cost, ironically, the circumstances which gave rise to the largest compensation claims were cases which went to An Bord Pleanála. Therefore, I do not share the Minister's concern as to what would happen at local authority level.
I have very little further to add. I am trying to leave the decision making process to the planning authority as they are very responsible people who make professional decisions.
Amendment put and declared lost.
Acting Chairman
Amendments Nos. 33 and 34 have already been discussed.
I move amendment No. 33:
In page 9, subsection (1), lines 37 to 39, to delete paragraphs (a) and (b) and substitute the following:
"(a) such amount, representing the reduction in value, as may be agreed,
(b) in the absence of agreement, the amount of such reduction in value, determined in accordance with the First Schedule, and
(c) in the case of the occupier of the land, the damage (if any) to his trade, business or profession carried out on the land.".
Amendment agreed to.
I move amendment No. 34:
In page 9, lines 40 to 42, to delete subsection (2).
Amendment agreed to.
Section 12, as amended, agreed to.
SECTION 13.
I move amendment No. 35:
In page 10, between lines 3 and 4, to insert the following subsection:
"(3) Compensation under section 12 shall not be payable in respect of the refusal of permission, or of the imposition of conditions on the granting of permission, for the retention on land of any structures to which section 28 of the Principal Act relates."
This amendment will clearly forbid compensation in any case where the planning application concerned was for retention of a structure. The reasoning involved is that, since retention cases by definition arise from some breach of planning requirement, it would be perverse if compensation could, even in theory, result from the planning decision in such cases.
I vigorously support the amendment. Has the Minister any intention to make it retrospective to Dublin County Council?
It did not occur to me. Has the Deputy a case in point?
Deputy Rabbitte earlier today put the case in question very eloquently.
I am aware of that.
Amendment agreed to.
Section 13, as amended, agreed to.
SECTION 14.
I move amendment No. 36:
In page 10, subsection (1), line 8, to delete "one month" and substitute "two months".
Amendment No. 37 is an alternative and, therefore, it may be discussed with amendment No. 36. Is that agreed? Agreed.
A number of planning authorities have expressed concern that the period of one month now provided in subsection (1) might not be adequate in all cases to allow suitable notices under section 14 to be drafted. The exact form of the notice granting an alternative permission in principle will have to be prescribed in regulations. Depending on the amount of detail which these regulations require, there could be substance in the local authorities' concern for a little more time. Deputy Shatter's amendment will provide for a three month period and my amendment provides for a two month period. My preference is for a two month period and I ask Deputy Shatter to agree.
I expressed concern about this section on Second Stage and I am pleased that the Minister has come back to us with an amendment. I am anxious to try to persuade the Minister that he should accept a three month period rather than a two month period. The Minister talked a few minutes ago about perversity, but I did not put in a period of three months to be perverse or to have a row about it. It is for very practical reasons.
A situation may arise where if a planning authority refuses planning permission a compensation claim could arise. The planning authority would be aware of that. Having refused permission the planning authority may take the view that there are other reasonable developments that could take place on the particular land in respect of which the planning application was made. Our experience of the processing of compensation claims is that it takes many months to deal with such claims. I am anxious that the planning authority, who might be at the receiving end of a compensation claim because of something An Bord Pleanála have done as opposed to something that the authority might have done, be given a reasonable period of time to consider what other developments are appropriate. The Minister made a point about the elected representatives of a local authority playing a role in this, and I am conscious of the fact that the officials of the planning department of a local authority notified of a decision of An Bord Pleanála which could trigger the use of this section may want five or six weeks to determine what they should insert in a notice. Equally, the elected representatives of that local authority may require the manager to bring any such alternative development proposal before the local authority for consideration before notice is served. A good manager, working in harmony with the elected members, will do that without being required to do so or a row developing within the local authority.
Officials of local authorities should not be rushed into proposing alternative developments. They should be allowed present their proposal to the elected members in good time to allow them time to consider that proposal. For example, if a problem arises as a result of a planning decision in the first week of July with the local authority not scheduled to have a meeting until the following September, the period of two months, while it is an improvement, will not be adequate. The three month period would get over all those problems. It would mean that local authorities would not be rushed or pressurised into making an alternative development proposal and it would give the elected members an opportunity to consider it, no matter what time of year it arises.
What I am suggesting would not in any way prejudice to any extent the land owner. He could still, if he was intent on preparing a compensation claim, get the preparation under way or decide to wait until the end of the three month period. Those acquainted with this matter are aware that it is highly unlikely that the extra month would create any major difficulties or that within the three month period an applicant would have formulated his claim with sufficient professional advice to have it ready to proceed any earlier. I accept that the Minister is being reasonable and helpful in tabling his amendment but I should like to ask him to accept the three month period. Such a change will ensure that hasty decisions are not made and that elected members of local authorities will have an input into the content of any notice that may be served under the section.
I reconsidered this matter and I have to say that the Deputy had a point. I was trying to concentrate the minds of local authorities on getting on with the business of giving the undertakings as quickly as possible. If I gave them too elastic a time frame they would be doing nothing. Planning authorities are capable of deciding on planning applications within a two month time frame and I thought it would be nice and neat when we have the two month regulation for deciding planning applications to have two months for the undertaking. When an undertaking is given it does not have to be a detailed permission, it is only an outline. The planning authority, subsequently, can get involved in the details of it. I did not have any hangup about one month, two months or three months but I wanted to keep a balance with the existing regulations. If the Deputy presses me I will not have any problem in accepting his amendment but it would be good if local authorities could see that we mean business. They could deal with this matter within the limit outlined and they can take as long as they like afterwards to deal with the detail.
I accept that it is good practice to set a time limit because if it is not set there will be problems. The Minister will be aware that where there is the two month rule, and there is a complicated planning application made to a local authority, notices are often served for additional information with the result that the two month time span has to be extended. In the context of ensuring that elected representatives have an input I do not think the three months is unreasonable or unnecessarily elastic. It will give time for consideration of the matter. The reality is that if this type of problem arises for local authorities there will be some degree of controversy. It is only right that the elected members of local authorities have some reasonable time to come to terms with the matter. I should like to ask the Minister to accept that.
Let us not waste any more time on this issue. I will accept the three months period.
Amendment, by leave, withdrawn.
I move amendment No. 37:
In page 10, subsection (1), line 8, delete "one month" and substitute "three months".
Amendment agreed to.
I move amendment No. 38: In page 10, subsection (1), line 15, after "granted" to insert ":provided that such permission would not contravene a development objective in the development plan".
Section 14 has been the subject of public comment mainly because the undertakings provision in existing legislation has been seen to have been used to the detriment of good planning. It is fair to say that in most of the cases where claims have been made for planning compensation the local authority have buckled under and granted an undertaking to the developer to carry out particular kinds of development. One of the worst effects of the existing planning compensation law is that it has resulted not so much in the large pay-outs of money — we have noted what they are — but that over the years, particularly in the Dublin are, a whole series of undertakings have been granted by local authorities for planning permission which were, to put it mildly, less than desirable. Local authorities, faced with a developer about to claim compensation, in order to avoid having to pay would grant an undertaking.
The Bill reintroduces the idea of undertakings albeit in a different way. It introduces it in a way in which the local authority by granting an undertaking for an alternative type of development can avoid having to pay out compensation. My concern is that that will result in planning authorities giving undertakings to developers in regard to particular types of developments precisely in order to avoid having to pay. This should not be an open-ended provision. Certain restrictions should be placed on it. The principal restriction that should be placed on it is the one that any undertaking given should not contravene the development objectives in the development plan.
There has been considerable concern about the integrity of development plans. Local authorities go through a very long procedure to draw up a development plan. It is the major opportunity in the whole planning process where the democratically elected members of a local authority can decide the way in which their area is planned. It is also the principal area where the general public can have an involvement in the planning process and in the future planning and development of their area through the opportunity that is presented to them to make submissions to a development plan and to participate in the process. The drawing up or the review of a development plan invariably takes two years or more. It has taken more than that in the case of the Dublin plans. Once that amount of time — and it is a democratic involvement of the people — is spent drawing up a development plan, I do not believe it should be possible for a local authority to give a developer an undertaking for a development which would contravene that development plan.
If we are to continue to have this provision in the legislation which enables local authorities to give undertakings which may result in developments which are less than desirable, then at a very minimum they should not contravene the development plan.
Progress reported; Committee to sit again.
I am advised that the Tánaiste and Minister for Defence wishes to make a brief announcement for the information of the House.