Watering down developers' contributions

My apologies for the lengthy post that follows. The press release from the DCLG (Department for Communities and local government) contains a lot of details of a government consultation about allowing developers to 'renegotiate' S106 agreements. "Section 106" agreements are the contributions they make towards local facilities when they get permission to build a new development - I think its 24 houses or over. For example Home Farm came with contributions to health and education, transport and a new community hall. Any of these could be endangered.

My own view is that S106 agreements are hard fought as it is without having any  nibbling away afterwards. They are also based on an assessment of need. I don't think that need has gone away.We have already received warnings that some developers are trying to renegotiate S106 contributions to local public transport (previous blog posting).

I have to say I'm particularly sceptical about the reference below to "Brokers will begin work immediately with an initial wave of councils" and other allusions to "teams of intermediaries". I sense the emergence of yet another layer of consultancy with which all business and public service development is plagued. The words "fat fees" spring to mind.

We will be discussing this in the planning committee on Wed 5 September. A response needs to be in by 8 October.

Eric Pickles takes steps to kickstart stalled developmen

Published

13 August 2012

Expert brokers will spearhead a fresh drive to get stalled housing deals up and running and builders back on moth-balled sites, Communities Secretary Eric Pickles announced today.
Mr Pickles is concerned that too much development is being stalled because of economically unrealistic agreements negotiated between councils and developers at the height of the housing boom. This results in no development, no regeneration and no community benefits at all when agreements are no longer economically viable.
The deals, known legally as Section 106 agreements, require developers to make a financial contribution to the community or provide housing, amenities or infrastructure as part of their planning permission.
Teams of intermediaries will now offer a free-of-charge advice and support service to councils and developers and will be available to help kick-start renegotiations of these deals to stop them being a barrier to getting building underway.

Councils to benefit from expert advice

Brokers will begin work immediately with an initial wave of councils that are keen to address obstacles that are preventing development in their area before working with other councils around the country. The experts will:

• provide technical expertise to unlock negotiations
• act as go-betweens in disputes
• offer access to a range of support services.

The Government is today also launching a consultation that proposes giving developers the option to ask councils to renegotiate Section 106 obligations if they were agreed prior to April 2010. Currently these obligations cannot be renegotiated for five years once a council refuses a request for voluntary renegotiation by a developer.
Communities Secretary Eric Pickles said:

"Tackling problems with stalled development is essential to getting builders back on moth-balled sites and building the homes we need. There is huge potential in sites to boost local economies and we simply cannot afford to have them lying idle because of earlier agreements that are no longer viable.
"The support and advice the expert brokers will offer is one of the many measures we have introduced to get development underway and I hope councils grab this chance to make use of the support we are offering.
"Our reforms to the planning system are already cutting planning red tape and making the system simpler and more accessible to communities and businesses. And further changes we're introducing will simplify national planning policy even more and streamline the planning application process."

Councils in Leeds, Ipswich, Corby, Swindon, Ashford, Gloucester, Kirklees, Carlisle, Northumberland and Durham will the first to benefit from the support offered by the expert brokers and will identify key stalled sites they want to see back up and running.
And opening up the renegotiation process further will provide another new opportunity to help get developments back on track, provide affordable housing and bring wider benefits for communities.
Ministers are clear that any renegotiations of Section 106 agreements will not remove the developer's obligation to provide critical infrastructure or other contributions to offset the effects of the development, and they should not result in land banking.
Deals need to be realistic and deliverable and will take commitment from both councils and developers to ensure they are delivered swiftly. And councils need to ensure they continue to consider local decision making processes when agreeing new deals.
Teams of expert brokers, along with officials from the Department and the Homes and Communities Agency will join together to work with the councils.
Pat Ritchie, chief executive of the Homes and Communities Agency, said:

"As a sector we need to see as many stalled sites as possible unlocked to deliver much needed new homes. We are currently using our investment to do this through Get Britain Building, while our support in unlocking large projects in the planning system - through our ATLAS team - is highly valued by local authorities and the private sector.
"So where sites are stalled because of agreements signed under very different economic conditions, we will work with councils to help see how we can get them moving again while meeting the needs and priorities of local communities."

It is estimated that there are currently more than 1,400 housing schemes of more than 10 housing units with planning permission that are stalled and unblocking these developments is a key part of the Government's Housing Strategy.
The support and advice being offered to councils is just one of a number of measures the Government is taking to help boost development. The £570 million Get Britain Building fund is tackling the housing shortage and creating jobs and the £770 million Growing Places Fund is providing local areas with flexible funding to get the infrastructure built needed to build new homes.
Today's announcement is a key step in encouraging all local authorities to consider renegotiating Section 106 agreements where development has stalled.
In March 2011, the chief planning officer wrote to planning authorities asking them to review agreements. The new National Planning Policy Framework requires councils to take account of market conditions and be sufficiently flexible to prevent development being stalled.

Notes to editors

1. The consultation document on renegotiating S106 agreements can be found at: www.communities.gov.uk/publications/planningandbuilding/renegotiationobligationsconsult.
2. The consultation proposes to amend the Town and Country Planning (Modification and Discharge of Planning Obligations) Regulations 1992 ("the 1992 Regulations"), in relation to England.
3. Glenigan Data, March 2012, estimates that there are currently 1,400 housing schemes of over 10 housing units with planning permission that are stalled.
4. Section 106A of the Town and Country Planning Act 1990 allows voluntary renegotiation of a planning obligation at any time. Where voluntary agreement cannot be reached there may be a formal request to reconsider an obligation when that obligation is five years old. The local authority must take a decision on such a request. If the local authority decision is not to renegotiate terms then there is a right to appeal to the Planning Inspectorate.
5. The consultation proposes that for planning obligations agreed on or prior to 6 April 2010, the relevant local authority can be asked to formally renegotiate the terms one month after the introduction of new regulations. In effect this will mean that the formal period of five years is reduced to between two and half and five years for these obligations. For all planning obligations agreed after 6 April 2010, the period will remain at five years.
6. New statutory tests were introduced for most planning obligations on 6 April 2010 which ensure that obligations agreed after that date must only cover what is necessary to make the development acceptable, must be directly related to the development and reasonable in scale and kind.
7. Government's Housing Strategy is entitled "Laying the Foundations: A Housing Strategy for England".
8. The Government has already taken steps to improve the planning system through the National Planning Policy Framework and the Localism Act and recently announced a number of measures to kick-start growth and reduce planning red tape. These include proposals to make it easier to re-use some existing buildings without needing planning permission, streamlining the amount of paperwork needed for a planning application, speeding up planning appeal decisions and reducing the volume of planning guidance.
9. The Get Britain Building fund provides Government investment in developments that revive building. This investment takes the form of loans or equity investments and is administered by the Homes and Communities Agency, the body responsible for assessing applications.

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