Government trains sights on s.106 agreements as part of growth strategy

Developers who can prove that affordable housing requirements under s. 106 agreements make a project unviable will be able to have the restrictions removed, under a shake-up of housing and planning unveiled by the Government.

Ministers claimed that the move could unlock 75,000 homes in projects that are currently stalled.

The Government said it would introduce legislation, to be effective from early 2013, setting out the new approach.

In a written ministerial statement, Communities Secretary Eric Pickles said this would allow “any developer of sites which are unviable because of the number of affordable homes, to appeal with immediate effect”. 

The Planning Inspectorate will be instructed to assess how many affordable homes would need to be removed from the s. 106 agreement for the site to be viable in current economic conditions, he added.

“The Planning Inspectorate would then, as necessary, set aside the existing s. 106 agreement for a three-year-period, in favour of a new agreement with fewer affordable homes.”

The Communities Secretary called on councils to seek negotiation solutions in any event before the legislation came into force.

Pickles added that the Government would lead a “fundamental and urgent” review of the array of different national and local standards used in s. 106 agreements.

The package of measures will also include legislation to allow planning applications to be decided by the Planning Inspectorate, if the local authority has “a track record of consistently poor performance in the speed or quality of its decisions”.

Pickles said: “Planning is a quasi-judicial process; justice delayed is justice denied. It is unfair to all parties for local authorities simply to fail to make timely decisions on a planning application – creating uncertainty both for applicants and local residents.”

The Government added that there would be a major infrastructure track for “thousands” of big commercial and residential applications.

A consultation on options to speed up planning appeals will be held shortly, and there will be a new fast-track procedure for some small commercial appeals.

The overall stimulus package – which ministers claimed would create 140,000 jobs – includes Government guarantees of up to £40bn worth of major infrastructure projects and up to £10bn of new homes.

The Infrastructure (Financial Assistance) Bill will include guaranteeing the debt of housing associations and private sector developers.

Ministers said the infrastructure guarantee and new capital funding of £300m and the infrastructure guarantee would bring in up to 15,000 affordable homes and bring back into use 5,000 empty homes.

Other announcements today include:

  • 5,000 homes will be built for rent at market rates in line with proposals outlined in the Montague Report on institutional investment in the private rented sector;
  • A taskforce to bring together developers, management bodies and institutional investors to broker deals and deliver more rented homes;
  • A £280m extension of the 'FirstBuy' scheme to March 2014 that could allow up to 16,500 first time buyers to buy a home;
  • The accelerated release of surplus public sector land through a strengthened role for the Homes & Communities Agency outside London. The Government will prepare the land for market and provide a ‘single shop window’. A similar approach will be taken in London, working with the Mayor;
  • A requirement for more transparent reporting of council performance on planning;
  • The Government will work with the Local Government Association to increase the use of Planning Performance Agreements for major schemes;
  • Handing planning inspectors more power to initiate an award of costs in planning appeal proceedings, “where it is clear that an application has not been handled as it should have been with due process”;
  • The Planning Inspectorate will be instructed to divert resources to prioritise all major economic and housing related appeals;
  • The extension by a further year of the measure allowing developers the chance to seek additional time to get their sites up and running;
  • A review of the thresholds for some of the existing categories in the major infrastructure planning regime. New categories of commercial and business development will be brought under the regime;
  • Work will be undertaken to extend the principle of a one-stop shop for non-planning consents for major infrastructure, and amend the Special Parliamentary procedures applying to major infrastructure;
  • Encouragement for councils to use the flexibilities set out in the National Planning Policy Framework to tailor the extent of Green Belt land in their areas to reflect local circumstances; and
  • A consultation on changes to increase existing permitted development rights for extensions to homes and business premises in non protected areas for a three-year period.

Prime Minister David Cameron said: "The measures show this Government is serious about rolling its sleeves up and doing it all it can to kick-start the economy. Some of the proposals are controversial; others have been a long time in coming.

“But along with our Housing Strategy, they provide a comprehensive plan to unleash one of the biggest homebuilding programmes this country has seen in a generation. That means more investment around the country; more jobs for our people; and more young families able to realise their dreams and get on the housing ladder."

But the LGA attacked the suggestion that the planning system was to blame for delays in new homes being built.

It was the lack of liquidity in the finance market for developers and the shortage of mortgages for first-time buyers that needed addressing, it said.

Publishing research suggesting that 400,000 new homes had received planning permission but not been completed and that building was yet to begin on more than half of approved plots, the LGA claimed that “at the current rate of construction it would take developers three-and-a-quarter years to clear the backlog”.

The Association also pointed to Government data showing that last year the overall percentage of planning applications approved by local authorities reached a 10-year high.

LGA Chairman Sir Merrick Cockell said: "These figures conclusively prove that local authorities are overwhelmingly saying ‘yes' to new development and should finally lay to rest the myth that the lack of new homes being built is the fault of the planning system.

"Even if planning departments did not receive another new home application for the next three years, there are sufficient approved developments ready to go to last until 2016 at the current rate of construction.”

He added: "Councils are also playing their part to unlock stalled sites by contributing land and assets, forming partnerships with developers and overwhelmingly saying ‘yes' to growth through the planning system.”

Sir Merrick also called on the Government to relax restrictions on council borrowing so that local authorities could pay for the construction of new homes and upgrade existing properties.

The Government’s stimulus package received a warmer welcome from the National Housing Federation, which represents housing associations in England.

Chief executive David Orr said the measures had the potential to transform the housing market. “It will provide homes for some of the millions of families on waiting lists, create jobs and give the UK economy a shot in the arm with a speed and effectiveness few industries can match.”

He added: “The only piece of the puzzle missing from this announcement is rapid access to public land. Government departments are sitting on parcels of previously developed public land equivalent of two cities the size of Leicester – this land needs to be made available so that housing associations can get cracking, build more homes at scale, boost the supply of affordable homes and create local jobs.”

The Royal Town Planning Institute meanwhile said it agreed that timely and appropriate planning decisions were important.

“However, claims that planners are a barrier to growth are misplaced,” a spokesman argued. “DCLG statistics show that for at least a decade, over 80% of planning applications have been granted and around 90% of major commercial applications (which are critical for economic growth) are successful.”

The RTPI claimed that “emerging evidence” suggested that the speed and quality of decision-making was improving in local authorities.

“Many small scale developments are already exempt from requiring planning permission,” the Institute pointed out. “For those small scale developments that need permission, evidence shows that permission is granted in the vast majority of cases.”

Philip Hoult