A blog about planning, planning law and planning policy


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Economic downturn and planning obligations – does this reveal Government doublethink?

DCLG has come out with two initiatives on planning obligations in the past week or so. It is consulting on allowing early amendment of pre April 2010 section 106 agreements  negotiated in happier economic times and is holding a workshop to support its national  research on value and impact of planning obligations.

These two initiatives continue to underline the erroneous approach of successive Governments to s.106 agreements. What do they get wrong?  We need to begin at national policy which is that conditions and s.106 agreements should only be required where necessary to make an application acceptable in planning terms. This is reinforced by regulation 122 of the Community Infrastructure Levy Regulations 2010 which only permits obligations which are necessary, directly related to the development and fairly and reasonably related in scale and kind, to be taken into account.  Let us also remember that s.38(6) of the Planning & Compulsory Purchase Act 2004 requires permission to be granted which is consistent with the development plan. (That is of course before we even get to the presumption in favour of sustainable development.)

So the idea is that planning obligations can only be required where necessary. In the absence of a change in material circumstances a planning obligation which met that test in April 2010 will continue to meet it in August 2012. So, say the predictions of family migration into an area  made in 2010 have not been met and are now lower, the education contribution secured by the planning obligation would appear no longer to be justified.   But in the absence of that (somewhat unlikely) change, the contribution is surely still required.

Here of course is the issue. Was it properly required in 2010 or was it an excessive amount which, rather than face the delay and uncertainty of an appeal, the developer decided to contribute?

The questions to be addressed at the research workshop are:

Potential factors that are holding back development of some sites and why other schemes go ahead smoothly; • The extent to which planning obligations impact on development viability; • The significance of affordable housing in this; • Where viability is a concern, what is needed to unlock development; • Good practice in negotiating and framing s106 agreements.

Isn’t this the wrong question?  It should not be “do obligations impact on viability?” but “is Government policy on planning obligations being followed?”

The flavour of discussion and debate among politicians and civil servants when addressing Planning Gain Supplement and Community Infrastructure Levy has been that a capital gain is made on the grant of permission and that is a resource for the community (or state).  And if we are honest that pervades much thinking on s.106 as well. Here is a current example, in Sir Adrian Montague’s report to DCLG, published today, on removing the barriers to institutional investment in private rented homes.  Working on the basis that land values for rented housing will be less than housing for sale, he writes that:

“Land values based on rental tenure, as outlined above, will often not be strong enough to support the imposition of extensive affordable housing obligations.”

But is the affordable housing obligation needed or not?  Does it meet the tests in Reg 122? And why should it differ if the tenure is rented rather than sale?  The clear inference is that higher land values justify higher planning obligations.

So as long as Government thinking works like this, we will have an atmosphere in which excessive s.106 contributions are permissible, with consequences not just in downturns, but for the price of housing and landowners’ returns.

3 comments to Economic downturn and planning obligations – does this reveal Government doublethink?

  • Matt Wardman


    3 issues!

  • Matt Wardman


    2 issues.

    1 Yes, I agree that obligations have expanded sideways to become almost a form of taxation.

    2 There’s an element of Councils behaving unlawfully in head-over-heels broadening of Section 106 applications because they have got away with it, and no one on the receiving end can easily/will take on trying to stop them.

    I looked at the Brighton documents in detail, and it was horrific.

    With CiL being less transparent (ie no list of identified projects etc) I see that getting worse.

    3 I’d love to see some numbers for how many developments are under water because of Obligations set when market prices for houses were 25-30% higher in real terms.

    Are there signs that ugly reality is intruding? – eg the Sunday Times reported a bit of a bloodbath of self-builds withdrawn in Rutland when they started sending out 30-40k bills.

  • Hear, hear. Planning obligation payments should only be sought where they are NECESSARY to make unacceptable development acceptable – and that is a high hurdle to jump, especially in these times when development is to be encouraged. The madatory ‘shopping list’ of play space, education, etc that is wheeled out by lpas for the most minor development cannot be NECESSARY by virtue of it being applied to all development. This should all be negotaited on a case-by-case basis and CIL should be dropped. Dr Anton Lang MRTPI.

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