Open consultation

​​Locally-led Development Corporation: A consultation paper

Published 10 April 2024

Applies to England

Scope of the consultation

Topic of this consultation

This consultation seeks views on draft Regulations in relation to how an oversight authority is to oversee a Locally-led Urban Development Corporation following its designation. In addition, we are also asking for comments on updating the New Towns Act 1981(Local Authority Oversight) Regulations 2018.

Geographical scope

These proposals relate to England only.

Impact assessment

The government is mindful of its responsibility to have regard to the potential impact of any proposals on the Public Sector Equality Duty, and therefore views are additionally sought on whether there are any impacts arising from these measures on those with a protected characteristic.

We do not consider that these proposed regulations will have any impact on businesses, charities or the voluntary sector. The consultation relates to the transferral of functions from central to local government for the purposes of the oversight of a locally-led development corporation. As a result, an impact assessment has not been undertaken

The creation of Locally-led Urban and New Town Development Corporations may result in additional costs for local authorities compared to other delivery vehicles for large scale development. It will though be entirely for the local authority or authorities covering the area of the proposed regeneration/growth area to decide to request the establishment of a Locally-led Urban or New Town Development Corporation, taking account of the costs and benefits this may bring.

Basic information

Duration

This consultation will last for 8 weeks from 10 April 2024 until 5 June 2024.

How to respond: You may respond by completing an online survey.

If you are unable to respond online, you may submit your response via email to: locallyleddevelopmentcorporationconsultation@levellingup.gov.uk

or by post to:

Development Corporations Consultation
Places, Infrastructure and Housing Delivery Directorate
Department for Levelling Up, Housing and Communities
3rd floor SW, Fry Building
2 Marsham Street
London
SW1P 4DF

If you are responding in writing, please make it clear which questions you are responding to.

When you reply, it would be very useful if you confirm whether you are replying as an individual or submitting an official response on behalf of an organisation and include:

• your name
• your position (if applicable)
• the name of your organisation (if applicable)
• an address (including postcode)
• an email address
• a contact telephone number

1. Introduction

1.1. Development Corporations are statutory bodies set up to facilitate development in areas that need large-scale co-ordination of investment and planning. When used in the right circumstances, these powerful delivery vehicles can bring a number of benefits including a clear geographical focus, broad powers to facilitate delivery of the project and the ability to attract private sector investment.

1.2. The model has been successfully used since the post-war period and has evolved overtime including the introduction of the Mayoral Development Corporation under the Localism Act in 2011 and the Locally-led New Town Development Corporation in 2018 as part of devolving power from central government to the local level.

1.3. Following the consultation we launched in October 2019, we have legislated to ensure that development corporations have the powers and functions necessary to unlock strategic development in all parts of England. We want to ensure that development corporations can be used effectively and are accessible in all areas of the country.

1.4. The Levelling Up and Regeneration Act (LURA) 2023 makes provision for the designation of a new type of Locally-led Urban Development Corporation (LUDC) model with the appropriate powers to support transformational regeneration and growth, overseen by local authorities (‘the oversight authority’) rather than the Secretary of State. This complements the introduction of the Locally-led New Town Development Corporation (LNTDC) model in 2018.

1.5. Provisions in the LURA 2023 also provide regulation making powers to modify the Local Government, Planning and Land Act 1980 setting out how an oversight authority is to oversee the regeneration of a Locally-led Urban Development Area. Similar regulations were made in 2018, introducing the LNTDC following amendments to the New Towns Act 1981 via the Neighbourhood Planning Act 2017.

1.6. This consultation therefore sets out our proposals and draft regulations (at Annex A) on how the oversight authority is to oversee the regeneration of a Locally-led Urban Development Area. It also asks for comments on updating the New Towns Act 1981 (Local Authority Oversight) Regulations 2018 as a result of changes in the LURA 2023 and to reflect the oversight regulations on LUDCs.

1.7. Both sets of regulations will be subject to the affirmative parliamentary procedure, whereby the regulations must be actively approved by both Houses of Parliament.

2. Draft Regulations in relation to Locally-led Urban Development Corporations

Principles/ objectives of the regulations

2.1. The Regulations provide the framework for overseeing a new Locally-led Urban Development Corporation (LUDC) delivery model, with the objective of regenerating its area and accountable to a local authority/authorities (‘the oversight authority’) rather than the Secretary of State for Levelling Up, Housing and Communities.

2.2. Our proposed policy objective is to ensure that the regulations are consistent as far as practicable with the existing New Towns Act 1981 (Local Authority Oversight) Regulations 2018. In instances where there are no equivalent functions in the new towns primary legislation as compared to the legislation for urban development corporations, we propose to transfer functions from the Secretary of State to the oversight authority, as far as these are necessary to ensure that LUDCs are genuinely locally-led and provide the framework for the oversight body to oversee the development corporation.

Question 1: Do you support the principles/ objectives of the regulations? If not, are there other considerations you would like us to reflect on?

The Transfer of Functions

Functions to be transferred to the oversight authority

2.3. Draft regulation 2 sets out which oversight functions of the Secretary of State are proposed to be transferred to the oversight authority. Draft regulations 3 to 5 set out further modifications to functions where the amendments to primary legislation require more complex drafting and involves the transfer of functions to the oversight authority and the removal of HM Treasury consent. The proposed transfer of functions is consistent as far as practicable with the existing New Towns Act 1981 (Local Authority Oversight) Regulations 2018 and localist principles.

Question 2: Do you agree that the proposed list of functions to be transferred to the oversight authority is the correct one? If not, please specify which functions you think should or should not be transferred and why.

Functions of the Secretary of State

2.4. There are a number of functions set out in draft regulation 6 that we propose can only be exercised by the Secretary of State with consent from the oversight authority. The functions where approval from the oversight authority has to be sought relate to the use of Secretary of State powers on allocation or transfer of functions, vesting by order and surplus funds.

2.5. We propose that, as is the case with LNTDCs, there are a limited number of functions where there is a persuasive rationale and supporting evidence for functions to remain solely exercisable by the Secretary of State, such as laying orders. In addition, there are a number of functions that we propose not to transfer to LUDCs, which we consider are now redundant; where it is not clear that the transfer of functions would have any practical effect in a contemporary context given the age of the primary legislation or where functions have not been previously transferred to an Urban Development Corporation. For example, Urban Development Corporations can have functions that can be conferred on a local authority under the Public Health Act 1936 and 1961 (section 159 of the Local Government, Planning and Land Act 1980).

2.6. We also propose not to transfer building control functions to LUDCs, particularly in relation to higher risk buildings. This is because the Government has committed to implementing Dame Judith Hackitt’s recommendations. A number of legislative reforms are being taken forward through the Building Safety Act 2022 and associated secondary legislation to raise standards in building control. We consider that it would not be appropriate to transfer building control functions from local authorities to LUDCs, and that they should focus on delivering the programme of regeneration.

Question 3: Do you agree that the proposed list of functions of the Secretary of State that may only be exercised with the consent of the oversight authority is the correct one? If not, please specify which other functions you think should or should not be transferred and why.

Aims of the oversight authority

2.7. We propose that the aims of the oversight authority in overseeing an urban development area are similar to those set out in the New Towns Act 1981 (Local Authority Oversight) Regulations 2018. We want to ensure that LUDCs create places that are high quality, which are sustainable, support good design and are futureproof for thriving and diverse communities. Accordingly, at paragraph 2 of Schedule 1 of the draft regulations we have provided for these aims.

Question 4: Do you agree that the aims of the oversight authority included in the draft Regulations promote and support high quality developments, with sustainability and community at its heart? If not, are there additional aims or should they include less prescription?

Disposal of land

2.8. Section 146 of the Local Government, Planning and Land Act 1980 allows an Urban Development Corporation to dispose of any land it considers necessary for securing or in connection with the regeneration of the corporation’s area. However, this excludes gifting land which is not replicated in the New Town Development Corporation legislation. Locally-led New Town Development Corporations can gift land, but they need consent from the oversight authority.

2.9. We would welcome views on whether these powers should be equalised across locally-led development corporations by removing the restriction on gifts for LUDCs but with specific modifications to include consent from the oversight authority before the disposal can take place.

Question 5: Should the powers on the disposal of land be equalised across Locally-led Development Corporations so that all LUDCs can gift land with consent? If so, please provide reasoning.

Board composition

2.10. Paragraph 3 of Schedule 1 of the draft regulations sets out the provisions on board membership. The approach taken ensures that there is good representation of independent, local authority and community and business members with the right level of skills, experience and local knowledge amongst them.

2.11. In summary, proposed provisions for the board composition mirror those of a Locally-led New Town Development Corporation board. Appointments are proposed to be made by the oversight authority and the majority of board members should be independent. In accordance with the principles of local authority appointments, the appointment of the chair, deputy chair and independent board members should be through an open, transparent and publicly advertised procedure. The draft regulations also set out that the oversight authority must have regard to appointing persons who have special knowledge of the locality. This could include, for example, members from local community groups or parish councils.

2.12. The draft regulations also provide that the corporation’s board must contain at least one member from each relevant authority covering the regeneration area, including any local authority which is, or forms part of, the oversight authority.

Question 6: Do you agree with the proposals for board membership set out in the draft Regulations? If not, how should these be changed and why?

Financial controls

2.13. Paragraph 4 of Schedule 1 of the draft regulations sets out the proposed changes to the financial controls and reporting requirements for LUDCs.

2.14. We want to ensure that decision making is transparent and appropriate safeguards are in place. At set out in the Levelling-Up and Regeneration Act (2023), when designating a Locally-led Urban Development Area, the Secretary of State must be satisfied that it is “expedient in the local interest” to do so. For the Secretary of State to be able to judge this, they will want to test the evidence on governance arrangements to ensure that scrutiny measures will be in place from the outset and respective responsibilities and delegations are clearly defined between the corporation and the oversight authority. Given that development corporations are bodies corporate, we expect that there is a published written constitution clearly setting this out.

2.15. We propose that provisions on borrowing should be consistent with Locally-led New Town Development Corporations, so that they may borrow with consent with the oversight authority. Borrowing limits and borrowing in other currencies in England will be agreed with HMT on a case-by-case basis and will be scrutinised to ensure feasibility and value for public money as part of agreeing the financial parameters within which the corporation will operate.

2.16. We also propose to make LUDCs relevant authorities for the purposes of Schedule 2 of the Local Audit and Accountability Act 2014, so that they are consistent with Locally-led New Town Development Corporation. This would mean that paragraph 9 -14 of Schedule 31 of the Local Government, Planning and Land Act 1980 would not apply as a number of accounting and audit requirements will then apply to the development corporation.

Question 7: Do you agree with the financial controls are set at the right level? If not, what should be changed?

Dissolution of corporation

2.17. Prior to designation of locally-led urban development area and the establishment of a LUDC, the Secretary of State has to be satisfied that doing this would be ’expedient in the local interest’. To ensure there is continuity of accountability of delivery, we propose that the Secretary of State retains the ability to dissolve the corporation without the consent from the oversight authority alongside allowing the oversight authority to request dissolution from the Secretary of State.

2.18. The use of the dissolution power by the Secretary of State would only be exercised in exceptional circumstance, for example, if the development corporation was failing to deliver its objectives, and unlikely to deliver them in the future. It is worth noting, that this power would be exercised as a last resort, and other options would be explored before such a decision is taken. The primary legislation requires that before dissolving a corporation, the Secretary of State would need to consult each local authority covering the area before making the order. The draft regulations do not change that position.

Question 8: Do you agree that the Secretary of State should retain the function of dissolving the LUDC without consent from the oversight authority? If not, please provide reasoning?

3. Updating the New Towns Act 1981 (Local Authority Oversight) Regulations 2018

3.1. The New Towns Act 1981 (Local Authority Oversight) Regulations 2018, came into force on 24 July 2018 and introduced the Locally-led New Town Development Corporation (LNTDC). This was made possible because subsection 16(2) of the Neighbourhood Planning Act 2017 inserted s.1A into the New Town Act 1981 (NTA 1981), permitting the Secretary of State to transfer the oversight of New Town Development Corporations established under NTA 1981 to one or more local authorities covering the designated area for the new town.

3.2. As a result of the changes made in the LURA and to ensure consistency with the proposals for regulations on the oversight of LUDCs in Section 2, we propose to update the 2018 Regulations.

Proposed changes to reflect provisions in the Levelling-Up and Regeneration Act 2023

3.3. As a result of provisions made in the LURA, we propose to remove redundant regulations which have been replicated. This would cover:

• Removing definitions which will be covered by provisions in the LURA.
• Removing Regulation 5(a) on the reduction of designated areas as provisions in the LURA amends section 2 (reduction of designated area) of NTA 1981.
• Removing paragraph 2 of Schedule 1, which deals with board membership, as provisions in the LURA will remove the board membership cap for centrally and locally-led New Town Development Corporations.

Question 9: Do you agree with the removal of redundant regulations that are covered by LURA? If not, please provide reasoning?

Proposed changes to reflect proposals for the oversight of Locally-led Urban Development Corporations

3.4. To ensure consistency, we propose to make one change to the New Towns Act 1981 (Local Authority Oversight) Regulations 2018 to reflect the above proposals concerning the dissolution of a LUDC and delegation of planning functions.

3.5. We propose to remove the oversight authority consent to allow the Secretary of State the ability to dissolve the corporation alongside allowing the oversight authority to request dissolution from the Secretary of State. We also propose to transfer the oversight functions from the Secretary of State to the oversight authority with regards to delegation of planning functions in Section 2.

3.6. The remaining provisions of the 2018 Regulations are proposed to be saved and therefore remain unchanged.

Question 10: Do you agree with the proposed changes to reflect proposals for the oversight of Locally-led Urban Development Corporations? If not, please provide reasoning?

Other issues

3.7. We have highlighted above the key areas that will need updating. We recognise though that there may be other points of detail which consultees may wish to raise on both the proposed regulations for LUDCs and updating the LNTDC regulations.

3.8. The government is also mindful of its responsibility under the Public Sector Equality Duty to have due regard to the potential impact of its proposals on people with protected characteristics. We would welcome any comments you may have on the proposals and how they might relate to the Public Sector Equality Duty.

Question 11: Are there any issues not picked up in the questions above you would like to raise? If so, please set these out.

Question 12: Do you have any views on the Public Sector Equality Duty in relation to any of the questions above?

About this consultation

This consultation document and consultation process have been planned to adhere to the Consultation Principles issued by the Cabinet Office.

Representative groups are asked to give a summary of the people and organisations they represent, and where relevant who else they have consulted in reaching their conclusions when they respond.

Information provided in response to this consultation may be published or disclosed in accordance with the access to information regimes (these are primarily the Freedom of Information Act 2000 (FOIA), the Environmental Information Regulations 2004 and UK data protection legislation. In certain circumstances this may therefore include personal data when required by law.

If you want the information that you provide to be treated as confidential, please be aware that, as a public authority, the Department is bound by the information access regimes and may therefore be obliged to disclose all or some of the information you provide. In view of this it would be helpful if you could explain to us why you regard the information you have provided as confidential. If we receive a request for disclosure of the information we will take full account of your explanation, but we cannot give an assurance that confidentiality can be maintained in all circumstances. An automatic confidentiality disclaimer generated by your IT system will not, of itself, be regarded as binding on the Department.

The Department for Levelling Up, Housing and Communities will at all times process your personal data in accordance with UK data protection legislation and in the majority of circumstances this will mean that your personal data will not be disclosed to third parties. A full privacy notice is included below.

Individual responses will not be acknowledged unless specifically requested. Your opinions are valuable to us. Thank you for taking the time to read this document and respond.

Are you satisfied that this consultation has followed the Consultation Principles? If not or you have any other observations about how we can improve the process please contact us via the complaints procedure.

Personal data

The following is to explain your rights and give you the information you are entitled to under UK data protection legislation.

Note that this section only refers to personal data (your name, contact details and any other information that relates to you or another identified or identifiable individual personally) not the content otherwise of your response to the consultation.

1. The identity of the data controller and contact details of our Data Protection Officer

The Department for Levelling Up, Housing and Communities (DLUHC) is the data controller. The Data Protection Officer can be contacted at dataprotection@levellingup.gov.uk or by writing to the following address:

Data Protection Officer
Department for Levelling Up, Housing and Communities
Fry Building
2 Marsham Street
London
SW1P 4DF

2. Why we are collecting your personal data

Your personal data is being collected as an essential part of the consultation process, so that we can contact you regarding your response and for statistical purposes. We may also use it to contact you about related matters.

We will collect your IP address if you complete a consultation online. We may use this to ensure that each person only completes a survey once. We will not use this data for any other purpose.

Sensitive types of personal data

Please do not share special category personal data or criminal offence data if we have not asked for this unless absolutely necessary for the purposes of your consultation response. By ‘special category personal data’, we mean information about a living individual’s:

• race
• ethnic origin
• political opinions
• religious or philosophical beliefs
• trade union membership
• genetics
• biometrics
• health (including disability-related information)
• sex life; or
• sexual orientation

By ‘criminal offence data’, we mean information relating to a living individual’s criminal convictions or offences or related security measures.

3. Our legal basis for processing your personal data

The collection of your personal data is lawful under article 6(1)(e) of the UK General Data Protection Regulation as it is necessary for the performance by DLUHC of a task in the public interest/in the exercise of official authority vested in the data controller. Section 8(d) of the Data Protection Act 2018 states that this will include processing of personal data that is necessary for the exercise of a function of the Crown, a Minister of the Crown or a government department i.e. in this case a consultation.

Where necessary for the purposes of this consultation, our lawful basis for the processing of any special category personal data or ‘criminal offence’ data (terms explained under ‘Sensitive Types of Data’) which you submit in response to this consultation is as follows. The relevant lawful basis for the processing of special category personal data is Article 9(2)(g) UK GDPR (‘substantial public interest’), and Schedule 1 paragraph 6 of the Data Protection Act 2018 (‘statutory etc and government purposes’).

The relevant lawful basis in relation to personal data relating to criminal convictions and offences data is likewise provided by Schedule 1 paragraph 6 of the Data Protection Act 2018.

4. With whom we will be sharing your personal data

DLUHC may appoint a ‘data processor’, acting on behalf of the Department and under our instruction, to help analyse the responses to this consultation. Where we do we will ensure that the processing of your personal data remains in strict accordance with the requirements of the data protection legislation.

5. For how long we will keep your personal data, or criteria used to determine the retention period

Your personal data will be held for two years from the closure of the consultation, unless we identify that its continued retention is unnecessary before that point.

6. Your rights, e.g. access, rectification, restriction, objection

The data we are collecting is your personal data, and you have considerable say over what happens to it. You have the right:

a. to see what data we have about you

b. to ask us to stop using your data, but keep it on record

c. to ask to have your data corrected if it is incorrect or incomplete

d. to object to our use of your personal data in certain circumstances

e. to lodge a complaint with the independent Information Commissioner (ICO) if you think we are not handling your data fairly or in accordance with the law. You can contact the ICO at https://ico.org.uk/, or telephone 0303 123 1113.

Please contact us at the following address if you wish to exercise the rights listed above, except the right to lodge a complaint with the ICO: dataprotection@levellingup.gov.uk or

Knowledge and Information Access Team
Department for Levelling Up, Housing and Communities
Fry Building
2 Marsham Street
London
SW1P 4DF

7. Your personal data will not be sent overseas

8. Your personal data will not be used for any automated decision making

9. Your personal data will be stored in a secure government IT system

We use a third-party system, Citizen Space, to collect consultation responses. In the first instance your personal data will be stored on their secure UK-based server. Your personal data will be transferred to our secure government IT system as soon as possible, and it will be stored there for two years before it is deleted.