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A wink and a nudge to corruption in our planning system

What do bribery, conflicts of interest, opaque lobbying, weak oversight, curiously timed donations, excessive hospitality, and the revolving door all have in common? They are all corruption risks inherent within our discretionary planning system.  

We should be worrying about the findings made by anti-corruption organisation Transparency International, who found many local authorities lack the necessary safeguards to prevent corruption in our planning system. This begs the question – why is the left not demanding more from planning reform?

Permission Accomplished shows us why because of corruption we should be sleeping with one eye open

Discretion, as opposed to rules, is arguably at the heart of our planning system. This creates inherent risks within the framework designed to provide democratic oversight to the development of our built environment. Not one of the responses to the Planning for the Future consultation made available to date, nor the Select Committee, have focused on the need for planning reform to combat corruption.

The definition of corruption according to Transparency International is “the abuse of entrusted power for private gain”. Corruption can come in many forms. It can be in the form of political donations to local branches of a political party around the same time as a planning application. Or it could be payments for the tuition fees of local councillors’ children.

There have been some high-profile cases in the past few years that have shed light on the flaws of our planning system. Transparency International case studied many of these in their report ‘Permission Accomplished’. By way of example, the report includes an investigation in Liverpool by the Serious Fraud Office (SFO) involving multi-million-pound developments where no minutes of meetings between developer, councils, and officials had taken place.

Assessing corruption risks requires us to look closely at how it occurs in the first place

A case study covered in the report looked at how a Conservative Chair of a London planning committee had become embroiled in allegations of impropriety. He was receiving excessive gifts that had not always been declared. By March 2018, following media pressure, the local councillor had referred himself to the Monitoring Officer. His self-referral warranted formal investigation.

The Investigating Officer found the volume and frequency of hospitality and gifts declared by the individual as “extraordinary”. Important to note that no evidence proved the hospitality had influenced any planning decisions. However, the council did find the actions breached their code of conduct.

Another case study in the report highlighted findings from an investigation by The Daily Telegraph. A Liberal Democrat councillor employed by a public affairs company was said to be using a range of lobbying tactics to secure planning consents for their clients. The councillor told the Daily Telegraph that the firm employed numerous former or present councillors at any given time.

If other councillors refused to talk to lobbyists about a particular planning permission certain ‘tricks of the trade’ could be used to get around this. For example, he claimed he could use contacts to try and replace difficult councillors on local authorities’ planning committees, with more agreeable ones to help secure permissions for clients.

We cannot expect every local authority leader to be followed by the eyes of Argus

Shortly after the Independent Mayor of Tower Hamlets was removed from office for election fraud, a fixer was recorded allegedly requesting a £2m bribe for four incumbent councillors. In addition, the individual allegedly also requested a £15,000 a month retainer for high-end hospitality from a developer seeking planning permission.

Below is an excerpt from a recording produced by the Sunday Times back in December 2017, having regard to an ongoing case noted in Permission Accomplished. The recording demonstrates the inherent weakness and lack of democratic oversight systemic within highly discretionary English planning system.

“We are lobbying certain members to try and approve this development. But of course, then there is the additional bit that we will be doing behind the scenes, and this is where the premium covers that.”

“The site doesn’t have planning on it. As soon as you buy, your team will have to put the application in, and the gatekeepers will bless it. End of.”

“Well it’s the elected members. Politicians that have a show of hands. You have seven people, in this case about seven. If you take out the deputy it is six key votes, six elected members, members that have been elected by people, by the public, they make the final decision”

Sunday Times Recording, December 2017

Labour Mayor John Biggs, who ran on an anti-corruption ticket, called in accountancy firm Ernst and Young to undertake a full and independent investigation of the developer’s claims of corruption. Since becoming Mayor, Biggs says he has fought hard to clean up the borough, and to tackle the corruption and wrongdoing of the past.

The whistle blowers’ allegations of bribery in connection with a planning application was swiftly considered by a Queen’s Counsel (QC) experienced in addressing bribery and corruption cases. Following the QC’s advice, the Chief Executive reported the allegations to the Serious Fraud Office. The case has since been referred to the National Crime Agency where it remains still under investigation.

Panelisation of planning decision-making removes consenting authority of councillors in beady-eyed Australia

In some places in Australia, legislation removes councillors from exercising any consent authority functions. Instead Australia in many places constitutes mandatory local planning panels, namely under the Planning Panels Act 2018. Mandatory local panels were argued to “bring expertise, transparency, and integrity” to the process of assessing planning applications. Planning authorities across Australia had exemplified the use of local planning panels from as far back as 1997.

Local planning panels have become a more conducive structure for development and industry in Australia. In particular following the success of Joint Regional Planning Panel (JRPP) introduced in 2009. These regional panels would be responsible for developments more than $20 million capital value. In effect removing local councillors from the decision-making process. This instead favours an independent decision-making body for regionally significant development applications, significantly reducing the risk of corruption.

Research reveals local authorities lack twenty-twenty vision over corruption risks

In their report Transparency International assessed 50 of 317 local authorities across the countries that have planning responsibilities in England. It found 32 councillors across 24 authorities holding critical decision-making positions in their local planning system, while at the same time also working for or on behalf of developers. This poses the question are we electing local representatives or political lobbyists?

Transparency International assessed how each local authority prevents, protects, and pursued corruption in planning decisions by local councillors. In it they judged these authorities against best practice standards. Developed by Transport International, and using evidence from their research, they built on existing work by the Committee on Standards in Public Life (CPSL) and the Local Government Association (LGA).

Local authorities were scored between zero and 100. 100 being seen to meet good practice. By this measure, not a single local authority taken from the 15 per cent sample demonstrated either a top or second quintile performance. This suggests local authorities are leaving themselves open to serious allegations of improper conduct by democratically elected representatives.

@TransparencyUK found many local authorities lack sufficient safeguards to prevent corruption. Labour should be demanding more from planning reform.

The corneal erosion of institutional checks and balances make the planning system fertile ground for abuse

The report found inadequate oversight to ensure probity in the planning process. It went insofar as to highlight major corruption risks relating to councillors’ involvement in planning decisions in the current system. Low levels of transparency, poor external scrutiny, networks of cronyism, reluctance or lack of resource to investigate alleged wrongdoings, and the sums of money involved provide a fertile environment for those entrusted to make planning decisions abuse it for private gain.

We have seen an erosion of institutional checks and balances on this behaviour. Independent audits of local authorities have been abolished. A universal code of conduct for councillors abandoned for local defined standard. All in combination with the capacity of our media having been watered down. Labour needs to continue picking up the mantle in tackling corruption, as has been the case lately following calls for tougher regulation of suspected money-laundering activities.

Lines between lobbyists and elected local representatives remain terribly blurred

Bob Colenutt, in his book ‘The Property Lobby: The Hidden Reality Behind the Housing Crisis’, makes a good point. He highlights to us the revolving door between local authorities, consultants, and developers is of equal importance to developers lobbying government . Many councillors have second jobs working as lobbyists and advisers to developers and housing associations. Often working in their own or adjoining areas.

Bob pointed to the case of Southwark in 2017. Here 20 per cent of the local authority’s 62 councillors were employed as lobbyists. Almost one in ten councillors in London either work for a property business or have received hospitality from them. Nearly 100 councillors have links to property companies or lobbying and ‘communications’ consultancies involved in planning.

The local councillor is a denizen of the English planning system. It is the discretion of these individuals over decisions that shape our built environment. Is it just a coincidence that our democratic planning system encourages so many councillors to work in lobbying for developers. Or does this need to change?

Local authorities can be more eagle-eyed if they reinforce recommended guidance and best practice

We need to increase transparency, tighten rules to protect the planning process from abuse for personal gain, and to strengthen oversight over councillors to deter behaviour that would bring the integrity of the planning process into question. Transparency International made the following ten recommendations:

  1. Minute and publish all meetings with developers and their agents for major developments
  2. Prohibit those involved in making planning decisions from accepting gifts and hospitality that risk undermining the integrity of the planning process
  3. Increase transparency over gifts and hospitality
  4. Stronger leadership from the industry on ethical lobbying
  5. Improved management of financial interests, which include the repeal of Section 31 of the Localism Act
    • To be replaced with a new requirement removing councillors from decisions where it can be reasonably regarded that they hold a significant conflict of interest that could prejudice their judgement
  6. Prohibit all councillors from undertaking lobbying or advisory work relating to their duties on behalf of clients
    • This should prohibit members from lobbying councils on behalf of paying clients
    • Prevent councillors from providing paid advice on how to influence councils
  7. Manage the revolving door between elective office and private business
    • Prohibit those who have recently worked as lobbyists for developers from sitting on planning committees
    • Or receiving executive responsibilities relating to planning
  8. Provide clear guidance and boundaries for councillors so they can better understand what is and is not acceptable behaviour
  9. Provide a meaningful deterrent for serious breaches of the code
  10. Increase transparency over investigations and enforcement actions

Transparency International’s report raises yet again alarm bells about risks that remain very real. Sadly, local authorities still remain ill-prepared to address them. Labour should give these anti-corruption recommendations serious consideration, put anti-corruption at the heart of its agenda, particularly when it comes to planning reform.

<strong><span class="has-inline-color has-accent-color">Christopher Worrall</span></strong>
Christopher Worrall

Editor of Red Brick. He currently works in land acquisition for Guild Living. Chris currently sits as a Non-Executive Director of Housing for Women and is a member of the Labour Housing Group Executive Committee.

One reply on “A wink and a nudge to corruption in our planning system”

That’s a really interesting and informative article. I think I’d have some doubts about the “panel” system used in Australia, if only because I suspect our land-values are higher and I can’t see what would stop developers/lobbyist nobbling panel members. What really bothers me is what looks like an (understandable?) lack of keenness by the Police to get involved with local politics.

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