Agenda item

To receive the report of the Director of Regeneration and Environment providing an update on the monitoring of Section 106 Agreements (S106) and progress on Section 106 matters during the period 1 April 2016 to 31 March 2016.

(Report No.77)

RECEIVED the report of the Director of Regeneration and Environment providing an update on the monitoring of Section 106 Agreements (S106) and progress on S106 matters during the period 1 April 2015 to 31 March 2016.

NOTED

1.     Apologies were received that no Planning Policy officers were in attendance (due to annual leave commitments), with the Chair’s agreement, to present the report. The report was presented by the Head of Development Management.

2.     Incorporated in the report was a recent update to national planning policy  via a written ministerial statement (WMS), by the government in November 2014. These recent changes would affect the Council’s approach to the collection of Section 106 monies in respect of affordable housing and education.

3.     Acknowledgement that in previous years there had been comments by members regarding the appended report format. The department now had a new IT package, which will enable the report format to be much more easily understandable and presentable.

4.     The report gives a brief overview of the Council’s position regarding the number of agreements currently in hand.

In summary:

·         March 2016 there were 275 live Section 106 agreements. With development commenced on 143 agreements (given permission) which has triggered payments which are now being used to support the necessary infrastructure and other associated benefits.

       In terms of finance:

·         There was £5.8M on account at the beginning of the 2015/16 financial year.

      Officers negotiated Section 106 agreements which identified a further £5.5M of contributions that could be used across the spectrum of affordable housing, education, transport, etc.

      Key receipts in this financial year is identified at para 3.4 (page 51) of the report, which shows the notable larger receipts received. During 2015/16 the Council had a Section 106 drawdown of approx. £3.2M for projects that the Council were committed and had identified. This left approx. £8M by the end of 2015/16 financial year. Of this, £1.6M has been committed for specific projects and £6.5M has been allocated to committed departmental specific projects.

5.     Table 2 at para 4.3 (page 52) of the report identifies where future funds have been secured through the planning process but not yet received. Planning permission has yet to be implemented.

Monies are usually generally payable upon commencement of the development. However, £4.8M has been secured for affordable housing and £2.8M secured for education.

The Section 106 process has been a key vehicle for the Council and has supported projects in these areas. However, the impact of contributions and the whole process has been seen as a dis-proportionate burden on developers, acting to slow down much needed housing.

      Consequently, the government introduced changes to the National Planning Policy guidance through a Ministerial Statement in November 2014. This sought to remove the ability from the local planning authority to collect tariff based contributions in respect of affordable housing and education, involving schemes of 10 units or less and under 1000sqm.

      This was quashed by the high court in July 2015 and as a result the local planning authority was able to continue to secure contributions in this area. However, in March 2016 the court of appeal ruled that changes to the national planning policy guidance and as a result of the Ministerial statement, were lawful. This led to the NPPG to be introduced and confirmed later that month.

       The Court of Appeal emphasised that despite the amendments to the NPPG, the discretion of the local planning authority and its decision making function remained unfettered. It was the responsibility of the local planning authority as to what weight to give to the policy having regard to the details of the case. Even though this change has been introduced by the NPPG, the Council has a local adopted DMD policy and it’s a question of what weight Development Management can give to each in making their decisions.

      The judgement said that; in the determination of planning applications the effect of the new national policy is that it would be inappropriate to acquire any affordable housing or social infrastructure contributions on sites below the threshold stated as 10 units or below. In light of this, planning officers considering applications for small sites which do not include contributions towards affordable housing/education should continue to have regard to the DMD document, which requires these contributions on small sites. Officers will also be required to look at other planning considerations that are in favour of granting planning permission, such as the Ministerial statement , NPPG, London Plan and the Council’s DMD.

      The Council therefore needs to give weight to these policies alongside the policy required contributions and as a result the Council often ends up in a situation where it is encouraged not to secure that contribution.

      These changes were also consistent with the Government’s high level desire to build more houses. By contrast, the policy which deals with affordable housing for sites up to 10 units or less was adopted in 2014. And prior to this date, is slightly out of date as regards the evidence it is based on. As a result of these circumstances the Council’s view is that without up to date evidence around housing and educational needs, inspectors would greater weight to the up to date NPPG policy and refusals on grounds where development has not provided educational or affordable housing contributions, and would be likely to succeed.

      Therefore, as a result of Counsel Opinion, the Council has stepped away from contributions on small scale schemes where normally officers would have identified an educational and affordable housing contribution. This was consistent with other Councils that have similar policies.

6.     Members’ debate and questions responded to by officers including the following:

a.    The Council Infrastructure Levy (CIL) overrides everything and was non-negotiable. The Council’s CIL and the Mayor of London’s CIL generate sums from developers’ and then officers look at Section 106 agreements and towards other things that need to be met. Identifying those and then looking at the supplementary planning guidance the Council produces on section 106 agreements.

b.    CIL monies would not make up the shortfall of losing Section 106 monies to smaller schemes. CIL generates significant sums but where that money is spent is identified by regulation 123  list. It is this list that identifies where CIL monies can be spent.

At this point in time, the Council has decided that the 123 list only includes the Meridian Water Development and the infrastructure required to deliver that phase. So all monies generated by the Council CIL goes into supporting and delivering the Meridian Water Infrastructure.

The guidance around the 123 list should be reviewed on a regular basis which may lead to this situation changing.

c.    If the Section 106 has been completed, officers take the view development has commenced in accordance with that planning permission. The obligation then is that section 106 monies are paid in their entirety.

d.    Previously, where the Council had a formal housing threshold of 15 or 25. The department had an increase in 14 or 24 development applications. The Head of Development Management expects developers to apply with 10 units (below threshold). However, Planners have to optimise development and if the application is under developed officers can challenge developers by saying that more could be secured on the development site within the character and framework of the area.

7.     The Chair asked members if there were any Section 106 cases they wanted to check on. The Chair wished to check on the following:

a.    Planning permission was granted for a block of flats on the south side of Slades Hill and the Committee requested that the developer had to provide a bus shelter. The Chair’s understanding was that the Council gave up waiting for this to happen, built the shelter and billed the developer. The Head of Development Management confirmed that the developer had not paid and were in the process of taking further action to retrieve this cost.

b.    The Chair’s request to Officers that if some Section 106 monies could be found for play equipment, the open space at Hoe Lane could benefit from play equipment as it is a large open space with no play equipment.

c.    If any members had any cases they wanted further information on, then they could e-mail Development Management officers.

AGREED that Planning Committee noted the contents of this report and its Appended report.