I am pleased to bring this Bill before Senators. There has been a long and constructive debate on it in the Dáil, as a result of which a number of important amendments have been made. In order to reflect these changes fully, and so as to avoid possible confusion, I have had a revised Explanatory and Financial Memorandum circulated for the Seanad discussion of the Bill.
Physical planning exists to regulate the development and use of land in the public interest. This central purpose is reflected in the Long Title of the Planning Act, 1963, which speaks of making provisions, in the interests of the common good, for the proper planning and development of cities, towns and other areas.
Unlike the United Kingdom, where development rights have been nationalised since 1948, development rights in this country belong in principle to the owner or other entitled person concerned and, as is well known, our Constitution gives qualified protection to such private property rights. Article 40.3.2 provides that the State shall by its laws protect as best it may from unjust attack and, in the case of injustice done, vindicate the property rights of every citizen. Article 43 guarantees that the State will pass no law attempting to abolish the right of private ownership. It provides, however, that the State may as the occasion requires delimit by law the exercise of this right with a view to reconciling its exercise with the exigencies of the common good.
These constitutional provisions both anticipate the regulation of private property rights involved in the planning system and set important limits to this but it would be wrong to imagine that planning compensation, within the meaning of the Planning Acts and the present Bill, arises solely from the requirements of the 1937 Constitution. The Town and Regional Planning Act, 1934, provided extensively for compensation of this kind, even though the Constitution of the Irish Free State, then in force, referred only in passing to rights of private property. Irish planning legislation has, accordingly, provided at all times for the possibility of compensation in certain circumstances where an adverse planning decision, or a planning scheme under earlier legislation, reduced the value of a person's interest in land. This principle, as I have said, arises as much from ordinary considerations of equity as from constitutional requirements.
The law on planning compensation has generally been guided by the rule, consistent with the polluter pays principle of more recent region, that compensation should not be payable for refusal of development which would clearly harm the public. On the other hand, planning compensation may be warranted in circumstances where development is refused or restricted in a way which amounts to forcing a particular landowner to subsidise a desirable community facility which should be the responsibility of society as a whole.
I have already made it clear that planning compensation for the purposes of this Bill relates not to any taking or appropriation of land by a planning authority but to the depreciation of the value of land which may result from an adverse decision on a planning application.
The purpose of this Bill is to amend and consolidate the law on planning compensation. The Bill also amends certain provisions of the sanitary services code so as to regulate connection of premises to public sewers and water supplies in a manner more consistent with the modern planning process. The major thrust of the Bill's new provisions is to give greater weight to the common interest in the determination of planning issues and greater protection to planning authorities in face of compensation claims.
Statistics on planning compensation claims have been systematically compiled only since 1982. In the period to 1987, these indicate that nationally an average of some 25 claims were made each year, with payment being made on average in two cases per year. The corresponding average number of planning applications was some 30,000 per year. There is a striking contrast between the amount of compensation claims over the past six years, which runs to many millions, and actual payments of compensation by planning authorities, which up to 1987 amounted only to some £90,000.
This bare presentation of statistics might appear to suggest that planning compensation poses relatively minor problems for planning authorities. The reality, however, is different. A well publicised compensation award of some £1.8 million was finally concluded against Dublin County Council in March, 1989 and this, and an earlier award against Dún Laoghaire Corporation, have focused the compensation issue very sharply. There is also the widespread perception that the threat of incurring heavy compensation liabilities may be inhibiting the proper exercise of planning judgment in certain cases.
Against this problematic background, there is now a substantial consensus on the need to strengthen the community bias, if I may call it that, of planning compensation law. In other words, there is seen to be scope for extending the range of non-compensatable circumstances and providing a workable mechanism for avoiding compensation by way of alternative development consent.
To address the Bill as it is drafted, I have already said that it will consolidate all of the law on planning compensation into one text. I regard this as a matter of some importance. The format of the 1963 Act provisions on planning compensation was quite obscure, associated as it was with provisions about the detail of development plans and with issues of compulsory purchase of land. There is no doubt that, at least partly due to these difficulties, a considerable number of compensation cases have arisen out of failure properly to understand and apply the law. In that sense, the much clearer presentation of the law which this Bill achieves should benefit all concerned with administering it and working with it.
The Bill breaks new ground in widening the circumstances for non-compensation; establishing new rules for assessing the amount of any compensation; providing a new procedure for alternative development consent, and regulating rights of connection to public sewers and water mains.
As regards widening the grounds for non-compensation, the Bill's major new provisions, effected for section 12 and the Third Schedule, can be summarised as follows: development may be refused without liability to compensation not just where water supplies, sewerage facilities or the road network are actually deficient, but also where their capacity is required for prospective other development; development may also be refused without liability to compensation if it is premature by reference to any order of priority for development indicated in a development plan; development may be refused without liability to compensation if the proposed development, by itself or by the precedent it would set, would adversely affect the use of a national road or other major road by traffic; refusal of planning permission will be non-compensatable for development which would cause serious air pollution, water pollution, noise pollution or vibration or pollution connected with the disposal of waste; compensation will be excluded where planning permission is refused because the proposed development would injure or interfere with a historic monument or an archaeological area, and compensation will be excluded also, except in narrowly defined circumstances, where planning permission is refused because the development would materially contravene an objective of the development plan.
In addition, refusal of permission will be non-compensatable by virtue of section 12 and the Second Schedule where the development would involve demolition of a so-called listed building, that is, a building of artistic, architectural or historical interest which it is a development objective of the development plan to preserve.
Section 12 and the Fourth Schedule add a number of new classes of conditions to those which may already be attached to a planning permission without liability to compensation. Finally, section 21 provides that three preservation orders may embody conditions, without compensation, requiring a proportion of woodlands to be preserved or the felling of trees to be phased.
The Bill also contains an important procedural innovation in section 13, designed to replace the "undertakings" procedure of section 57 of the 1963 Act, which has been found unsatisfactory by the courts. This new procedure will allow a planning authority to rebut a compensation claim by a notice stating that in their opinion alternative development ought to attract planning permission. This notice can only be defeated if planning permission is subsequently refused or conditioned in a manner inconsistent with the permissive statement.
Finally, the Bill will implement a number of provisions arising from the report of the Joint Committee on Building Land (Pl. 3232). The rules for determining the amount of compensation have been fully revised by section 11 and the First Schedule and will now stand independently of the compensation rules applying to CPOs. I will return to these new valuation rules in a moment.
The question of connection to public sewers and water supplies was also addressed by the Joint Committee. Sections 25 and 26 of the Bill deal with this issue. Under section 25 connection to public sewers will no longer obtain as a right of the person connecting but will be subject to the consent of the sanitary authority concerned. Under section 26 the right of a supply of water for domestic purposes will no longer obtain in the case of unauthorised development.
The measures proposed by this Bill have already attracted considerable comment. Most of this has been directed at the new approach to assessment of compensation embodied in the First Schedule and at the provisions of the Third Schedule whereby in general compensation will be excluded where proposed development would materially contravene the zoning of land.
To deal first with the assessment of compensation, the Bill of course severely limits the right to planning compensation, but in cases where planning compensation should still be payable, the measure of it should be the reduction in the value of a person's land which is directly attributable to the adverse planning decision.
Rightly or wrongly, the valuation rules of the 1963 Act seemed to encourage a maximalist approach to assessing compensation. In practice, compensation tended to be based on the difference between the value of land following the adverse planning decision and its notional value had the planning permission been granted, albeit subject to suitable conditions. In other words, the top line for valuation purposes tended to be set by the landowner's own aspirations for development of his land in the form of his planning application.
The most important and radical provision of the First Schedule is to do away with this maximalist assumption. The top line which it fixes for valuation purposes is simply the realistic market value of the land immediately before the adverse planning decision, but the new rules make it absolutely clear that only reasonable prospects for developing the land are to be embraced in this assessment. In particular, regard must be had to the fact that the land might not, at the relevant time, have carried any substantial planning permission and that its prospects of obtaining such permission would have to be viewed by the market as uncertain. The new rules categorically disallow any automatic presumption in favour of the kind of planning permission which the owner was seeking.
The valuation framework proposed in the new First Schedule is clearly structured around the difference between the antecedent and the subsequent realistic market values of the land, subject to all of the qualifications provided by the previous rules. As well as making the fundamental change which I have mentioned, the new First Schedule also reorganises and refines most of these previous rules.
The second major policy issue addressed by the Bill is the general rule established by paragraph 11 of the Third Schedule that refusal of development which would materially contravene a current zoning objective will be non-compensatable.
I am satisfied that this principle is in general a correct one. However, its application would create a situation where planning authorities could, in theory at least, arbitrarily change the zoning of land without any regard to the financial implications for landowners who might have made a recent investment on the basis of a different zoning. I do not believe for a moment that planning authorities would wish to procure such unjust consequences but, equally, I do not think that the legislation should even leave open the possibility of such consequences.
For this reason, paragraphs 12 and 13 of the Third Schedule embody the safeguard that compensation will not be excluded on zoning grounds where the land had a zoning in the previous five years with which the development proposal would have been compatible, and the person claiming compensation acquired his land interest before the new restrictive zoning came into operation or was formally notified in draft by the planning authority. Both of these conditions have, of course, to obtain together.
The Bill, therefore, upholds the general principle that developers should not be able to press for compensation where development would contravene current zoning. It makes exception only for landowners whose lands have been "down-zoned", that is, from development to non-development zoning.
These new measures will provide a very substantial and comprehensive defence for planning authorities against compensation claims. Taken together with the improved provisions which the Bill is making in many other areas, they will greatly strengthen the position of planning authorities in administering planning control.
Given that a revised and comprehensive Explanatory and Financial Memorandum has been circulated, I propose to deal briefly and selectively with the detail of the Bill. Part I makes a number of standard provisions regarding interpretation and commencement. Section 3 repeals all of Part VI of the Planning Act, 1963, which is being replaced by the provisions of this Bill.
Part II of the Bill sets out common provisions, mainly procedural, for different kinds of compensation claims. In general, claims for compensation must be made within six months of the relevant planning decision, and there is provision for regulations regarding the detail of claims. Double compensation, that is under this Bill and any other enactment in respect of the same land, is prohibited by section 7, and section 10 provides for the clawback of compensation by a planning authority in any case where development is carried out on land on which compensation has been paid.
The most important provision of Part II is section 5. This continues the arrangement whereby, in default of agreement, the amount of planning compensation must be determined by arbitration under the Acquisition of Land (Assessment of Compensation) Act, 1919. As I have explained, a new set of rules, contained in the First Schedule, will guide the assessment of compensation.
Part III of the Bill deals with planning compensation in the context of decisions under Part VI of the 1963 Act. In layman's language, this means decisions on applications for permission to develop land or to retain structures, or what is normally referred to as planning permission. Revocation or modification of planning permission is also included.
Section 11 continues the basic principle of planning compensation whereby a person is entitled to be paid compensation by a planning authority if the value of his interest in land is reduced by a refusal or a conditioning of planning permission. This entitlement is, however, heavily qualified by sections 12 and 13.
Section 12 is the key section of the Bill. Through the Second, Third and Fourth Schedules of the Bill respectively, section 12 lays down classes of development which, in themselves, will not attract compensation, reasons for the refusal of planning permission which exclude compensation, and conditions which may be imposed on planning permission, without compensation. All non-compensatable circumstances from the 1963 Act are preserved. Further important non-compensatable circumstances are added, and these I have already described in some detail.
Section 13, as I have already explained, is intended to replace the so-called "undertakings" provisions of section 57 of the 1963 Act, which have been found unsatisfactory by the courts, with a different procedure.
Section 14 gives an exceptional power to the Minister for the Environment, in limited circumstances, to order the payment of compensation where this would otherwise be excluded by the strict application of the compensation provisions of sections 12 and 13. This power of waiver, which parallels section 58 of the 1963 Act, is desirable so that the constitutionality of the Bill will not necessarily be threatened by hard cases arising in the operation of its normal provisions.
Part IV of the Bill deals with compensation in relation to a range of possible decisions by planning authorities which in practice arise much less frequently than decisions on planning permissions. The matters involved include discontinuance of an authorised use of land, removal or alteration of a hedge, compulsory creation of a right of way, and damage arising from cabling or pipeline work. The Bill merely re-enacts existing law on all of these matters.
However, section 21 considerably extends the provisions of section 45 (2) of the 1963 Act so as to give greater protection from compensation to planning authorities in the context of tree preservation orders. While I do not believe that planning legislation is competent to handle all of the difficulties which have emerged in this area — its perspective is necessarily that of amenity rather than of specialised botany or silviculture — nevertheless, I think that improved planning provisions can make a contribution to this matter.
Section 21 contains two new provisions: first, that felling consents may from now on, without compensation, attach conditions requiring the preservation of up to 20 per cent of trees in woodlands, where considerations of special amenity value or interest obtain; and secondly, in the same circumstances, that felling consents may, without compensation, require the felling of trees in woodlands to be phased over a period of up to 20 years. These measures strike a balance between reasonable amenity interests, on the one hand, and the requirements of commercial forestry on the other.
Part V of the Bill is designed to modify certain long-standing rights of connection of premises to public sewers and water supplies which are established in sanitary services legislation so as to make these more consistent with the overall control of development by planning authorities envisaged by the planning system.
Under section 23 of the Public Health Act, 1878, owners and occupiers of land are entitled to connect their drains to existing sewers within the district of a sanitary authority subject to complying with any regulation which the authority has made concerning the mode of connection, but regardless of the capacity of the sewer to cope with additional connections. Section 24 of the 1878 Act enables owners and occupiers of premises outside the sanitary district to connect drains or sewers to the sewerage system of the sanitary authority — on terms to be agreed by the parties or settled by arbitration. Accordingly, it is not at present possible for a sanitary authority to refuse a connection to a premises after it has been built inside or outside the sanitary district, regardless of the position under planning law.
A similar right to connection to water supplies exists under section 53 of the Waterworks Clauses Act, 1847. These rights, as they stand, could undermine the other provisions of this Bill allowing planning authorities, without compensation, to refuse development on grounds of deficiency in water or sewerage services. Accordingly, section 25 provides that, in future, premises shall require the consent of the sanitary authority — through planning permission or a special form of approval — for connection to a public sewer. Section 26 provides that the right to a supply of water for domestic purposes shall only extend to dwelling houses which are authorised under planning law. Section 24 of the Public Health Act, 1878, is being repealed under section 3. This particular right is inappropriate from a planning control viewpoint and in future, if connections to a sewer are required from outside the sanitary district, they should be arranged by agreement.
This Bill is a coherent and comprehensive response to the problems of planning compensation as well as being one of the measures targeted for enactment under the Government's Environment Action Programme. It will enable planning authorities to deal with the vast majority of planning cases free of any threat of compensation and to act more resolutely in the public interest. At the same time, limited and necessary provision for planning compensation is being retained for cases where a property owner is required to accept an exceptional degree of restraint on his development rights in the common interest.
I have given Senators a very comprehensive statement and outline of the provisions of this very complex Bill. It has received a great deal of debate in the Dáil and I have no doubt it will here as well.
I commend the Bill to the House.
