Levelling-up And Regeneration Act 2023

Policy background

Framework for Levelling Up and setting and reporting on missions

21. The Levelling Up the United Kingdom White Paper sets out the Government’s long-term programme for addressing geographic disparities across the United Kingdom. The Government concludes in the White Paper that no single policy or intervention can achieve levelling up on its own. Instead, it requires action from both the public and private sectors and cuts across almost all areas of central and local government – from education, criminal justice and health to transport, planning and the economy. Central to setting the right ambitions and driving change are the twelve cross-cutting missions set out below. The White Paper explained that the missions do not limit or constrain the Government’s ambitions, but rather represent the first priorities in a medium-term, continuously evolving and collaborative programme across the UK.

The 12 Levelling Up Missions

Boosting productivity, increasing pay, and creating jobs

1. Increasing living standards: pay, employment and productivity will have risen in every area of the UK, with each containing a globally competitive city, and the gap between the top performing and other areas closing.
2. Backing Research and Development (R&D) by increasing public investment in R&D outside the South East by at least 33% over this Parliament and at least 40% by 2030.
3. Overhauling public transport so local connectivity will be significantly closer to the standards of London, with better services, simpler fares and integrated ticketing.
4. Transforming digital connectivity across the UK with nationwide gigabit-capable broadband with 4G and 5G coverage for the majority.

Spreading opportunity and improving public services

5. Improving education outcomes so that 90% of primary school children achieve the expected standard of reading, writing and maths.
6. Increasing the number of adults who complete high quality skills training, with 200,000 more people completing training annually in England.
7. Increasing healthy life expectancy, and narrowing the gap between areas where it is highest and lowest.
8. Improving wellbeing in every area of the UK with a closing gap between the top performing and low performing areas.

Restoring pride in place and community

9. Boosting satisfaction with town centres and engagement with local culture and community.
10. Increasing home ownership and housing standards, with more first-time buyers in all areas and the number of non-decent homes down by 50%.
11. Cutting crime with homicide, serious violence and neighbourhood offences falling, with a focus on the worst affected areas.

Empowering local leaders and communities

22. Giving every part of England that wants one a devolution deal, with powers at, or approaching, the highest level of devolution and a simplified long-term funding settlement.
23. The Act creates a statutory duty for the Government to set missions (through a ‘levelling -up missions statement’). The levelling-up missions statement will be laid before Parliament and published; and will be accompanied by the methodology and metrics the Government intends to use to evaluate its progress towards their delivery. The Act also creates a statutory obligation for the Government to report annually (the ‘annual report’) on progress towards the delivery of each mission in the levelling-up missions statement. These reports are intended to use publicly available data to evaluate progress towards the delivery of missions. The object of this measure is to make sure this and future governments are held to account by Parliament; and that information on progress is transparently available to the public.
24. The legal framework in the Act provides the foundation for a broader programme of government work to level up the United Kingdom. To support this, the Government is setting up an external Levelling Up Advisory Council, which will support Ministers by advising on the design, delivery and impact of government policy on the levelling up aims. The programme of further work includes: the creation of 55 Education Investment Areas in England; using the £1.4bn Global Britain Investment Fund to attract more major investments to all parts of the UK, and a £1.5bn Levelling Up Home Building Fund, which will provide loans to SMEs.

Devolution

25. Since 2010, the Government has increasingly sought to grant greater powers to local areas– with the passage of the Localism Act, the introduction of Police and Crime Commissioners, City Deals and democratically elected mayors in metropolitan areas. The Levelling Up White Paper also notes that the UK is a highly-centralised country compared to the OECD average, with less spent by subnational governments than in other peer countries. The Levelling Up White Paper attributed the cause of geographic disparities in part to low levels of ‘institutional capital’ (defined as local leadership, capability and capacity), in particular local leaders lacking the powers and accountabilities to design and deliver effective policies for tackling local problems and supporting local people.
26. There are currently twelve areas which have enhanced devolution in England:
    • Greater London
    • Cornwall
    • Greater Manchester
    • Liverpool City Region
    • West Midlands
    • Tees Valley
    • Cambridgeshire and Peterborough
    • West of England
    • South Yorkshire
    • North East
    • North of Tyne
    • West Yorkshire
27. The majority of these areas have been created on the current model of a mayoral combined authority (whereby they have a directly elected Mayor, such as in Greater Manchester, Liverpool City Region and the West Midlands). Combined authorities were first created under the Local Democracy, Economic Development and Construction Act 2009; mayoral combined authorities were introduced outside of London by the Cities and Local Government Devolution Act 2016. The specific powers devolved to each of these areas through secondary legislation are bespoke and were subject to negotiations with central government, but can include greater powers over transport, skills, employment, public health and Police and Crime Commissioner functions.
28. The Levelling Up White Paper set a mission to ensure that all areas of England would be offered a devolution deal by the end of 2030 with powers at or approaching the highest level of devolution with a simplified, long-term funding settlement.
29. The White Paper also set out the Devolution Framework, indicating what level of powers the Government would devolve to the different types of local government structures, with the fullest extent of powers being granted to a single institution with a directly elected mayor across a functional economic area or whole county geography. The White Paper also announced negotiations on devolution deals with the 13 areas listed below:
    • Cornwall;
    • Derbyshire and Derby;
    • Devon, Plymouth and Torbay;
    • Durham;
    • Greater Manchester;
    • Hull and East Yorkshire;
    • Leicestershire;
    • Norfolk;
    • North East
    • North Yorkshire and York;
    • Nottinghamshire and Nottingham;
    • Suffolk; and
    • West Midlands
30. The Government has concluded and announced devolution deals with 5 areas: York and North Yorkshire; that part of the East Midlands which includes Derby, Derbyshire, Nottingham, and Nottinghamshire; Cornwall; Norfolk; and Suffolk. The East Midlands deal is dependent on the enactment of provisions in the Act necessary for the establishment of the proposed East Midlands Mayoral Combined County Authority and Norfolk and Suffolk are planning to use "mayoral title" provisions. All deals are now subject to the statutory processes, including secondary legislation to implement the deals.

Combined County Authorities

31. The Levelling Up, Housing and Communities Select Committee produced a report on their inquiry into the progress of devolution in England in October 2021 1 . The Government responded in March 2022 2 .
32. The Act supports the delivery of the Local Leadership Mission, fundamental to deepening devolution across England, by including measures to create a new model of combined county authority, consisting of upper-tier local authorities only. At present, the available model for establishing a combined authority is primarily designed for urban areas. To address this, the Act creates a new model for a ‘combined county authority’, which is made up of upper-tier local authorities only. The main difference between combined county authorities and combined authorities is the membership: a combined county authority must include one two-tier county council and at least one other upper tier county council or upper tier unitary authority (i.e. district councils cannot be members and do not consent to the forming of a combined county authority), whereas a combined authority has to include all the local authorities within the area it is to cover (i.e. in a two-tier area, the county council and all district councils must be members, and consent to the forming of the combined authority). In all other matters, there is parity between the two types of authority.
33. The new model for a ‘combined county authority’ provides a model which is more appropriate for non-metropolitan areas, many of which have two-tier local government. The Act also streamlines the process for authorities to bring forward proposals for combined authorities. The Act reduces the consent requirements regarding changing the constitutions of combined authorities, which are required to extend or deepen devolution deals negotiated with central Government. The Act also includes measures to enable local authorities to move into directly elected leadership governance models more quickly to support devolution deals. Measures in the Act will also enhance the overview and scrutiny and audit of new and existing combined authorities by enabling remuneration for committee members to attend relevant meetings. Finally, the Act provides for authorities with directly elected mayors to give those mayors a title reflecting the character and preferences of that area.

Local Government Borrowing

34. The Act provides Government with means to investigate and remediate instances of local government borrowing. The Act grants powers to the Secretary of State to set a trigger point in relation to borrowing risk, after which central Government will have powers to: request information, request a review, set a borrowing cap or require a local authority to reduce its risk.

Council Tax

35. The Act introduces a discretionary council tax premium on second homes and changes the qualifying period for use of the long-term empty homes premium. Local authorities may levy a premium of up to an additional 100% on council tax bills for second homes and for empty homes after one year (as opposed to two years which is the current requirement). Neither of these are mandatory requirements. The Act provides a power to vary the maximum percentage for the second homes premium. The Government consulted on exemptions to this policy during passage of the Act.

Street names

36. The current system for changing a street name relies upon three Acts which date from the early 20th century. This mix of provisions across the country, many of which are over a century old, has led to a lack of transparency on where each Act applies. Under the available legislation, many councils can change the name of a given street unilaterally, without consulting the residents on that street.
37. The Act grants a power to the Secretary of State to set out the process to secure consent on any proposed changes to a street’s name. This will be supported by regulations (which may be supplemented by statutory guidance) on the process which local authorities will be required to have regard to. Together these changes will ensure all local authorities follow the same process for changing street names and that they cannot do so without the consent of those who live on the street. The Government published a technical consultation which ran from 11 April 2022 to 22 May 2022 3 on associated changes to regulations and statutory guidance in order to create a common requirement across England for votes on proposed changes of street names. The response was published on 5 July 2022 4 .

Other provisions

38. The Act clarifies the existing law to confirm that there is no prohibition which prevents parish councils from providing funding for the upkeep of places of worship.
39. The Act also removes the specific restrictions upon voting upon housing matters which applied to the Common Council of the City of London, causing the law as it would apply to any other authority to apply.

Regeneration

40. The Act contains measures which enable local authorities and their leaders to regenerate their communities, in line with the mission to restore pride in place as set out in the Levelling Up White Paper. This also supports the mission that by 2030, people’s satisfaction with their town centre, and engagement in local culture and community, will have risen in every area of the UK with the gap between top performing and other areas closing.

Compulsory purchase of land

41. Compulsory purchase is the power to acquire land and property without the consent of the owner. It is an important tool for assembling land needed to help deliver developments which regenerate areas to deliver social, environmental and economic change. The Government introduced a number of reforms through the Housing and Planning Act 2016 and the Neighbourhood Planning Act 2017 aimed at making the process clearer, faster and fairer. The Government’s High Street Strategy5, published in July 2021, emphasised the role of compulsory purchase as a catalyst for regeneration in town centres and high streets which are seeing persistent long-term empty properties, and where there are complex and fragmented land ownership patterns.
42. The Act streamlines and modernises Compulsory Purchase Orders (CPO) and grants the power to local authorities to use CPO for regeneration purposes. These changes would empower local decision making and improve transparency regarding local authorities’ power to acquire brownfield land compulsorily for regeneration in their area.

Development Corporations

43. Previously, there were four types of development corporation: the New Town Development Corporation, the Urban Development Corporation, the Mayoral Development Corporation and the locally-led New Town Development Corporation. Each model reflected the time and circumstances when they were introduced, and thus had varying powers and remits.
44. In October 2019, DLUHC launched a consultation on development corporation reform 6 to seek views on the legal framework for the operation of development corporations and to invite ideas on how it might be reformed. The responses to the consultation identified instances where the available models of development corporation do not provide the scope or powers required. For example, there is no model for the purposes of regeneration available to local authorities outside of Mayoral areas.
45. This Act makes provision for a new type of Locally-led Urban Development Corporation, with the objective of regenerating its area and accountable to local authorities in the area rather than the Secretary of State. It also updates the planning powers available to centrally and locally-led development corporations, so that they can become local planning authorities for the purposes of local plan-making, overseeing neighbourhood planning and development management. This is to bring them in line with the Mayoral Development Corporation model. The Act amends the process for establishing Locally-led New Town Development Corporations, removes the cap on the number of board members and removes the aggregate limits to borrowing.

High Street Rental Auctions

46. High levels of vacant commercial property are a challenge for many places across the country. In November 2021, 14.5% of all high street units in retail and leisure were vacant. 7 This continues a pre-pandemic trend, where vacancy rates gradually increased from 10.9% in 2017 to 12.2% at the start of 2020. While some level of vacancy can be a sign of natural business churn and will include units that will be filled relatively quickly or are in the process of being filled, around 30 Local Authorities in England have a vacancy rate of above 20%, with some up to 32%. 8
47. These vacancies are not evenly distributed, with seven local authorities in the north west and north east having particularly high vacancy rates. This has implications for the Government’s levelling up agenda. Persistently high levels of vacant property can fuel a spiral of decline in places which poses an obvious form of scarring and can undermine pride in place.
48. In accordance with the Government’s priority to regenerate high streets, as set out in the Levelling Up White Paper, the Act gives local authorities powers to auction the rental rights for vacant commercial properties in town centres and on high streets, for leases from one to five years to attract new tenants. These powers can be exercised at the discretion of local authorities, based on their local context and need, but only on properties which have been vacant for over 12 months.
49. High Street Rental Auctions will seek to increase cooperation between landlords and local authorities to address vacant premises, and to make town centre tenancies more accessible and affordable for tenants, including SMEs and community groups.

Land Transparency

50. The Act includes measures that will facilitate a better understanding of who owns or controls land. It implements the 2017 Housing White Paper commitment to publish data on contractual arrangements used by developers and others to control land, short of ownership, to assist local communities in better understanding the likely path of development and identify anti-competitive behaviour. The Government consulted on the proposals in August 2020.

Planning

51. The planning measures in the Act have been informed by more than 40,000 responses to the Government’s 2020 White Paper ‘Planning for the Future’ 9 , and the subsequent inquiry into planning reform by the Commons Housing, Communities and Local Government Select Committee 10 .
52. Planning is critical to the Government’s ambition to level-up the country. The new system will be based on the principles of: beauty, infrastructure, democracy, environment and neighbourhood engagement. How the Act addresses each of these five principles is set out below.

Beauty

53. The Act will require all local planning authorities to have a design code in place covering their entire area. The area-wide codes will act as a framework, for which subsequent detailed design codes can come forward, prepared for specific areas or sites and led either by the local planning authority, by neighbourhood planning groups or by developers as part of planning applications. This will help ensure good design is considered at all spatial scales, down to development sites and individual plots.

Infrastructure

54. The Act replaces the current system of securing developer contributions (through section 106 agreements and the Community Infrastructure Levy) with a new Infrastructure Levy. The rates and thresholds will be contained in ‘charging schedules' and set and raised by local planning authorities (rather than nationally), meaning that rates can be tailored to local circumstances and deliver at least as much onsite affordable housing. Charging schedules must have regard to previous levels of affordable housing funded by developer contributions such that they are kept at a level that will exceed or maintain previous levels. All schedules will be subject to public examination.
55. There will also be a process to require developers to deliver some forms of infrastructure that are integral to the design and delivery of a site. To make sure that infrastructure requirements and levy spending priorities are considered carefully, the Act places a new duty on local authorities to prepare infrastructure delivery strategies to outline how they intend to spend the levy.
56. In preparing their development plans, local authorities may consult infrastructure providers where changes to or investment in their infrastructure is required to support development, such as providing for transport, education, the environment, healthcare, or blue light services. Under the Act, those infrastructure providers will be obliged to respond and to assist as is reasonable in the preparation of the plan.
57. The Act enables Community Land Auctions to be piloted. These are an innovative approach to identifying land for allocation for development in a local planning authority’s area, in a way which seeks to improve land value capture for the benefit of local communities.

Democracy

58. Local plans will be given more weight when decisions are made on applications so that there must be strong reasons to override the plan, providing communities more certainty. The same weight will be given to other types of plan, including neighbourhood plans prepared by local communities and spatial development strategies produced by Mayors or combined authorities.
59. The Act requires each local planning authority to prepare one local plan, with the content limited to locally specific matters such as allocating land for development, detailing required infrastructure and setting out principles of good design. General policies on issues that apply in most areas (such as general heritage protection) will be set out nationally and contained in a suite of National Development Management Policies, which will have the same weight as plans so that they are fully taken into account in decisions. Local plans will not be able to repeat these.
60. The Act makes several other changes to improve the process for preparing local plans: new powers will enable the introduction of ‘Gateway’ checks so that issues are identified earlier during plan preparation, and allow time periods to be prescribed for different parts of the plan preparation process, enabling delivery of a timebound end-to-end process; digital powers in the Act will allow use of more standardised and reusable data, there will be a new requirement for local planning authorities to produce a consolidated policies map of the full development plan for their area, improving the clarity and transparency of plans; and the ‘duty to cooperate’ contained in existing legislation is being repealed.
61. Local planning authorities will have a new power to prepare ‘supplementary plans’, where policies for specific sites or groups of sites need to be prepared quickly (e.g. in response to a new regeneration opportunity), or to set out design codes for a specific site or area or across their whole area.
62. The Act will also enable groups of authorities to collaborate to produce a voluntary spatial development strategy, where they wish to provide strategic planning policies for issues that cut across their areas (echoing the powers conferred on some Mayoral combined authorities already).

Environment

63. A new system of Environmental Outcomes Reports will replace the EU processes of Environmental Impact Assessment and Strategic Environmental Assessment whilst retaining the UK’s obligations under the UN Aarhus and Espoo Conventions.
64. The Act introduces an outcomes-based approach that will allow the government to set clear and tangible environmental outcomes which a plan or project is assessed against. This will allow decision-makers and local communities to clearly see where a plan or project is meeting these outcomes and what steps are being taken to avoid and mitigate any harm to the environment. These outcomes will be set following consultation and parliamentary scrutiny and will, for the first time, allow the government to reflect its environmental priorities directly in the decision-making process.
65. By moving to an outcomes-based approach, and taking powers to address procedural issues with the current system, the Act provides the opportunity to go further for the environment and to turn passive assessment into a more active tool to support environmental regeneration.
66. The Act places a new statutory duty on water companies in England to upgrade wastewater treatment works to the highest technically achievable levels for nutrient removal in designated catchments by 1 April 2030. Treating the achievement of the nutrient pollution standards as certain in a Habitats Regulations Assessment will mean lower levels of mitigation will be required from developers, reducing costs and enabling sustainable development.

Neighbourhoods

67. The Act introduces a new neighbourhood planning tool called a "neighbourhood priorities statement". This will provide communities with a simpler and more accessible way to set out their key priorities and preferences for their local areas. Local authorities will need to take these into account, where relevant, when preparing their local plans for the areas concerned, enabling more communities to better engage in the local plan-making process. Alongside this, the Act will also prescribe in more detail what communities can address in their neighbourhood plans and amend the ‘basic conditions’ to ensure neighbourhood plans are aligned with wider changes to the planning system.
68. The Act introduces a new planning consent regime that enables residents to propose development on their street and, subject to the proposal meeting certain requirements, to vote on whether that development should be given planning permission. This is intended to encourage residents to consider the potential for additional development on their streets, and support a gentle increase in densities, in particular, in areas where additional new homes are needed.
69. The Act amends the Self-build and Custom Housebuilding Act 2015 to ensure that only planning permission made available explicitly for self-build and custom housebuilding qualifies towards the ‘duty to grant planning permission etc’ and is counted to meet the demand for self and custom build. This will enable relevant authorities to meet their statutory duties in a more consistent and focused manner.

The planning application process

70. The Act will increase certainty in planning decisions by imposing a new duty on decision makers to make planning decisions in accordance with the development plan and national development management policies unless material considerations strongly indicate otherwise.
71. The Act will enable improvements to the planning application process for all users with greater powers to regulate information requirements for planning applications (in particular in digital formats) to improve consistency and accessibility; improve community engagement by making permanent regulation-making powers to mandate consultation prior to planning applications being submitted; and introduce an improved process for making non-substantial changes to existing planning permissions. The Act will also enable temporary relief to be given for enforcement action against prescribed planning conditions, in certain circumstances, where it is necessary to lift constraints on operations (as occurred with construction and delivery hours during the recent pandemic).
72. The Act will take powers to speed up the process of dealing with applications for nationally important Crown developments in the planning system. This includes a new process for nationally important and urgent developments, and a new route which will allow the Crown to apply directly to the Secretary of State for determination of nationally important development.

Enforcement

73. The Act amends and strengthens the powers and sanctions available to local planning authorities to deal with individuals who fail to abide by the rules and process of the planning system. This includes facilitating enforcement action by closing existing loopholes which can be exploited to prolong unauthorised development, allowing more time for the investigation of breaches, introducing enforcement warning notices, making the enforcement timescales that currently apply more consistent, and increasing fines.

Protecting heritage

74. Measures in the Act will also strengthen the critical role the planning system plays in protecting the historic environment.
75. The Act will make changes so that designated heritage assets, such as registered parks and gardens, World Heritage Sites, protected wreck sites, and registered battlefields, enjoy the same statutory protection in the planning system as listed buildings and conservation areas.
76. It will also put Historic Environment Records on a statutory basis, placing a new duty on local authorities to maintain one for their area. The enforcement powers available to protect historic buildings will be enhanced, by introducing temporary stop notices; strengthening the power to issue Urgent Works Notices by extending them to apply to occupied listed buildings; making the costs of carrying out works a local land charge to aid cost recovery by local planning authorities; and removing the compensation liability in relation to Building Preservation Notices.