Archived decisions

Contact: Richard Lemon, ext 6760/Chris Walton, ext 6906

1. Summary

1.1 To complement the wider review of planning contained in the Green Paper `Planning: delivering a fundamental change', the Government has also published a consultation document containing proposals for the reform and improvement of the planning obligations system. Response to the consultation is required by 18 March 2002.

1.2 This report summarises and considers the main proposals for reforming planning obligations and recommends to the Executive Member for Environment a response.

2. Introduction

2.1 Planning obligations are agreements, negotiated under Section 106 of the Town and Country Planning Act, between a local planning authority and a developer, forming part of a planning consent They are the means by which a local authority can ensure that developers contribute, financially or in kind, to the provision of infrastructure, services or facilities required to facilitate a development, or which are made necessary by a development. `Planning gain' is a term used to describe this process, although sometimes this phrase is also used to describe the provision of facilities over and above what is required by a development and outside the Section 106 framework.

2.2 Although some elements of transport infrastructure are sometimes covered by Section 106 Agreements, the majority of developer contributions towards highway infrastructure are negotiated under separate legislation; Section 278 of the Highways Act. The consultation paper does not make reference to Section 278 Agreements.

2.3 Since planning obligations were introduced in the early 1990s, the operation of the system has been "inconsistent, unfair and lacking in transparency" (paragraph 1.7) according to the consultation paper. Although some local authorities have been very successful in securing contributions, some have been unsure about the extent to which they can reasonably negotiate, others have been accused of ransoming developers with unreasonable demands and the system is also entirely discretionary. Guidance was provided with Circular 1/97 which set out some key `necessity' tests for acceptable and reasonable contributions, but the system remains something of a grey area, prone to misinterpretation, missed opportunity and legal challenge. The current system is also potentially time-consuming and seen by the Government as something which can frustrate or delay development.

3. The Government's Proposals.

3.1 The Government believes that reform is necessary to produce more certain, consistent procedures with a clear purpose. The object of the reformed system would be to:

(i) encourage positive planning by using planning obligations to help achieve wider planning objectives, rather than being restricted to mitigating environmental impacts which is often the current focus;

(ii) achieve sustainable development by ensuring that any development provides social, economic and environmental benefits;

(iii) increase the delivery of affordable housing; and

(iv) contribute towards the funding of larger scale sub-regional level infrastructure which may not be readily attributable to small-scale developments.

3.2 The preferred approach to improve the system, selected from five options discussed in an annex to the consultation paper, is for planning obligations to take the form of a standard tariff set through the local plan process. National guidance would be issued about the working of the tariff system and legislation introduced to require the tariff to be paid for all qualifying developments.

3.3 The consultation paper suggests that the level of tariff should be set based on either gross floorspace, numbers of dwellings or as a proportion of development value, but the Government welcomes views on the best approach. Views on an appropriate development size threshold for the application of the tariff are also sought.

3.4 The tariff will be the basis of negotiation of a single obligation for all developments and is intended to cover all aspects for which contributions may be sought. The consultation, however, recommends that the tariff could either be added to, for example, where a special infrastructure arrangement is necessary, and reduced or waived in the case of, for example, some urban brownfield or contaminated sites where it might make development financially unviable. It is also proposed that tariffs could be pooled to contribute towards sub-regional infrastructure. The level of tariff and the criteria establishing the qualifications to its application would be set out in local plan policy or supplementary guidance as part of the new arrangements proposed in the Green Paper.

3.5 New arrangements for public scrutiny, monitoring and accountability are proposed to ensure transparency and openness.

4. Affordable Housing

4.1 To improve the delivery of affordable housing and provide local authorities with more flexibility, the consultation proposes that in future contributions towards the provision of all affordable housing should be through the tariff system. All existing procedures and guidance on this subject would be withdrawn. The proposal is that the tariff supporting affordable housing should be applied to all developments, residential and commercial, regardless of whether or not affordable housing is provided on site. Contributions will therefore allow local authorities the flexibility to secure affordable housing on the most appropriate sites, supported financially by development elsewhere. The consultation paper proposes to allow specific sites to be allocated purely for affordable housing.

5. County Planning Officer's Comments

5.1 Reform of the planning obligations system is well overdue and the objective of refocusing around sustainable development is to be welcomed. As a method of ensuring that appropriate infrastructure and services are provided alongside new development, the current system is difficult to operate and substantially under-used.

5.2 The concurrent provision of new infrastructure and services with new development, which the proposals are designed to enhance, is a major objective of the County Structure Plan and a Corporate Key Area of Achievement contributing to the improvement of Quality of Life. A County Council strategy on Infrastructure Provision and Developer Contributions is being prepared to ensure that all County Council services establish their costed requirements for new developments and the basis on which contributions will be justified and sought. This information will be fed into the planning process through a negotiating protocol with the local planning authorities. This comprehensive corporate approach is encouraged by the consultation paper and the Corporate Statement will therefore be an important element in the establishment of the tariff in Hampshire local authorities.

5.3 The advantages of the tariff system, applied to all developments, are therefore to be supported, as is the proposed flexibility in application to sites with special circumstances. Other proposals worthy of support are:

(i) the provision of central guidance with flexibility for local interpretation;

(ii) the retention of negotiated agreements for site specific issues;

(iii) the ability to pool contributions to meet sub-regional needs;

(iv) use of the dispute resolution mechanism; and

(v) the proposed production of practical guidance and model clauses.

5.4 On the subject of an appropriate threshold there is no justification for excluding any developments since all contribute to additional demands on local infrastructure and services. A combination of numbers of dwellings and gross floorspace should be used to set the level of tariff.

5.5 The inclusion of affordable housing in the tariff system raises concerns. An improved more flexible system designed to deliver more affordable housing is undoubtedly required, and the consultation paper proposal may well achieve this. However, the concern is that affordable housing will become the overwhelming element in the negotiation of planning obligations, particularly financially, to the exclusion of the other essential infrastructure and services required to create communities. Affordable housing is not a requirement brought about by new development and does not sit comfortably with the other elements for which contributions are sought. The list of infrastructure and services for which contributions are sought is already very large, and the procedures, even with the tariff approach, are complex. Although an improved system for the delivery of affordable housing is necessary, it is not appropriate, and may be counter-productive, to achieve it through reform of the planning obligations system.

5.6 The second area of concern relating to affordable housing is the proposal to allocate sites purely for this purpose. This approach is not consistent with the objective of encouraging balanced inclusive communities and should be opposed.

5.7 The consultation paper is also silent on the subject of minerals and waste planning which is, and is set to remain, an important statutory planning function of the County Council. Obligations under Section 106 are widely used in planning consents for minerals and waste; most commonly used for restoration, after-use and transport matters. If the reform is to produce a simplified system and a tariff covering all potential obligations applicable to all developments, it is essential that it includes references to their use in minerals and waste planning. A partial reform of the system, as currently proposed in the consultation paper, would result in more rather than less complexity. In this respect it is also essential that the level of tariff reflects the requirements of County Council services such as transport, education and social services, and other agencies such as health authorities and emergency services.

5.8 While reform of the obligations system to meet the Government's objectives is to be supported and welcomed, the complexity of agreeing a tariff applicable to all developments covering all potential contribution items must not be underestimated. Substantial resources will be necessary to achieve an agreed tariff and to apply it to the myriad range of development proposals and circumstances. The current system has also been plagued by legal dispute and challenge and whatever replaces it must be legally watertight and carefully thought through from the outset.

6. County Surveyor's Comments

6.1 The consultation paper does not acknowledge that, in terms of their value, a large proportion of contributions negotiated by agreements as part of planning consents relate to highway and transport infrastructure. Although most of these are negotiated under Section 278 of the Highways Act they nevertheless represent part of the package agreed between the local planning authority and the developer, and there is an increasing tendency for public transport and other transportation agreements to be included as Section 106 obligations.

6.2 The current project to produce a corporate Statement on Infrastructure and Contributions will include the requirements of the County Council as highway authority as part of the overall contribution package to be negotiated with the local planning authorities. To provide the basis for the transportation element of this package a consultants report proposing alternative approaches is nearing completion.

6.3 If the planning obligations system is to be reformed to achieve the Government's objectives, particularly to improve the contribution of planning obligations to securing sustainable development, then it is essential that contributions towards highway and transport infrastructure and facilities is a central part of the reformed system and the single obligation.

Recommendation

That the Executive Member for Environment be informed that the Secretary of State for Transport, Local Government and the Regions be advised that whereas the County Council in principle welcomes the proposed reforms to the planning obligations system it considers that:

(i) the tariff approach must be flexible in application;

(ii) affordable housing should be excluded as an element in the tariff and an improved mechanism for the delivery of affordable housing introduced independently; and

(iii) the proposed reforms should be expanded by:

(a) making specific proposals for the use of obligations in minerals and waste planning;

(b) incorporating highway obligations, currently under Section 278 of the Highways Act;

(c) making provision for the needs of non-local Government agencies and services to contribute to the establishment of the level of tariff and negotiated agreements.

7027/RLn/CJW