Contact: Dawn Heppell, ext 5011 email: [email protected]

1. Summary

1.1 The following decision is sought:

That the comments in Section 4 of the attached report be endorsed as the basis for the County Council's response to this consultation document.

2. Reason

2.1 To respond to the Government's consultation.

3. Other Options Considered and Rejected

3.1 Not to respond to the Government's consultation.

4. Conflicts of Interest Declared by the Decision Maker or a Member or Officer consulted - None.

5. Dispensation granted by the Standards Committee - Not applicable.

6. Reason(s) for the Matter being dealt with if Urgent - Not applicable.

Approved by: .................................... Date: ..................................

Councillor T K Thornber

Contact: Dawn Heppell, ext 5011 email: [email protected]

1. Summary

1.1 `Planning obligations' are legal undertakings made by developers in association with the granting of planning permission. Commonly, they are financial contributions negotiated between the developer and the local authority for the provision of public infrastructure and facilities outside the development site.

1.2 The Government has produced a consultation draft document entitled `Contributing to Sustainable Communities - A New Approach to Planning Obligations' to provide details of the Government's proposals to update the system of planning obligations. Comments are required by 8 January 2004. The consultation period is short because the intention is to introduce early legislation to enact the changes. The key change provides for developers to elect to pay a standard tariff rather than the existing arrangement for a negotiated contribution.

1.3 The County Council should support the general approach of the document, but should raise concerns over the application of tariffs to very large sites, the inability of local authorities to opt for the negotiations route, the need for flexibility in how the money can be spent, and that the same tariff should apply to all sites, including windfall sites.

2. The Government's Proposals

2.1 This consultation on changes to planning obligations forms part of the Government's measures to improve the working of the planning system in England. It seeks to provide greater transparency and certainty for those involved in the planning system.

2.2 The proposed new approach will replace the current adopted guidance contained in Circular 1/97. In summary the Circular states that it is reasonable to expect developers to pay for or contribute to the costs of infrastructure that would not have been necessary but for their development, and to pay for facilities to remedy existing deficiencies which are materially exacerbated by the development.

2.3 Case law on the use of planning obligations has broadened the scope of acceptable contributions beyond the guidance contained within Circular 1/97. One aim of the proposed new approach is to eliminate this disparity in the granting of planning obligations. In addition, it identifies that contributions may not accurately reflect the true impact of development on services and infrastructure. The consultation proposes replacing the current policy guidance and introducing new legislation to implement a new approach to planning obligations.

2.4 Revised policy guidance is proposed which would:

(i) enable negotiated planning obligations to contribute to a range of impacts such as local public transport initiatives, education and health services;

(ii) use the development plan process as the basis for negotiating and securing contributions, requiring local authorities to set out in their Local Development Framework (LDF) the contributions they seek and include formulae for contributions that are predictable;

(iii) enable local planning authorities to secure ongoing contributions;

(iv) encourage the voluntary pooling of contributions within the local authority area or across authorities for negotiated obligations and the new planning charge; and

(v) allow local planning authorities and developers to use standard heads of terms and clauses for planning obligations.

2.5 The proposed legislation would:

(i) establish an option for developers to elect to pay a standard planning charge, expressed as a cost per dwelling/area of floorspace, as an alternative to negotiated financial planning obligations;

(ii) enable the planning charge to be set at different levels for different types of development, such as brownfield and greenfield sites. The consultation paper invites views on whether the charge should apply only to sites identified in the development plan; and

(iii) allow local authorities to set the charge at a fixed cost according to the size of the development, including an affordable housing contribution as either a financial or in-kind contribution or a combination of both.

2.6 This consultation should be viewed in the context of a changing Government approach to funding affordable housing and transport. The Housing Corporation asserts in its Investment Policy that it would not expect to provide Social Housing Grant for affordable housing produced through planning obligations. This grant reduced the level of planning obligations required from developers to deliver affordable housing. There is already considered to be a shortfall in the funding received from the Government for transport infrastructure and there is the potential that this financial burden will shift further toward developer contributions. Both these changes will increase the pressure on planning obligations to deliver extra funding. However, the Government is clear in the consultation document that it does not expect the burden on developers to increase as a result of introducing an optional tariff.

3. Hampshire County Council Developer Contributions Protocol

3.1 Work has been underway for some while on a draft Developer Contributions Protocol for Hampshire County Council services, with a provisional date of summer 2004 for its adoption. This sets out and justifies a financial contribution per dwelling to be sought from all residential development in Hampshire and seeks to establish the communication and management arrangements necessary to implement the Protocol. Contributions are calculated for highways and transportation, education, libraries, countryside and waste management services. The draft Protocol's approach is consistent with that now proposed by the Government. The draft Protocol will be presented to Cabinet in spring 2004 for consideration. However, this covers only County Council services and will need the agreement of District Councils to be incorporated into their Local Plan/LDF.

4. Comments of the Director of Environment

General Comments

4.1 In responding to this consultation, the views of other departments in the County Council involved in the developer contributions protocol have been sought. In general, the updating of the policy guidance on the implementation of planning obligations and the introduction of an optional planning charge is welcomed in principle.

Setting the Optional Planning Charge

4.2 The introduction of a new optional planning charge tariff is supported, although it would be helpful for the document to provide guidance on how an acceptable tariff could be calculated. Further guidance is required on how the inclusion of affordable housing as part of the planning tariff will operate in practice.

4.3 Tariffs will be calculated as a cost per unit based on the impact of new developments on a range of infrastructure and services. The draft proposes that the tariff should apply to all sizes of sites and that, where a developer chooses to pay the tariff, they should not be required to make any additional contributions. However, very large sites, such as Hampshire's Major Development Areas, may need additional infrastructure and services, such as social services centres or a completely new school. For these sites, the standard tariff may not reflect the full impact of large scale developments. The County Council should therefore call for the document to allow local authorities to set a maximum threshold above which the tariff would not apply. This would be set at a level to reflect local circumstances and enable local authorities to negotiate contributions based on the specific requirements of larger developments.

4.4 There should also be the option for the local authority to require negotiations on a particular site of whatever size, if its development would generate an unusually high requirement for public infrastructure and services. This would extend to local authorities; the same choice as would be open to developers.

4.5 The draft states that one of the reasons for changing the current system is that contributions may not accurately reflect the true impact of development on services and infrastructure. There is therefore a potential conflict between the aspirations and priorities identified by local authorities to address the full impact of development and the Government's expectation that its proposals will not on average lead to additional costs to developers.

4.6 The basis for negotiating and securing contributions is the development plan process. There is a concern that, as inspectors will have the binding decision on the content of LDFs, they, rather than the local authorities, would determine the tariffs. However, this may be helpful in securing contributions for County Council service infrastructure requirements where it has not been possible to reach agreement with the District Council.

Flexibility to Use Contributions

4.7 The Government's document asks for views on whether local authorities should spend the receipts only on specific items listed in the LDF or whether there should be more flexibility in how the money is spent. Whilst it is acceptable to require local authorities to state the different components of the tariff, for example the amount required for education contributions, it would be unacceptable to require details on specific schemes. It is unrealistic to expect local authorities to anticipate the precise schemes/projects which will be needed over the ten or more years' time horizon of an LDF.

4.8 Planning obligations could remain open and transparent by ensuring that the contributions are spent on the services for which they have been raised.

Different Levels of Contribution

4.9 The Government's proposal for different levels of contributions for some types of land or development, eg brownfield and greenfield sites, is not justified. Planning obligations contribute to the cost of community facilities and infrastructure arising from new development. Development has an impact and requires services and infrastructure wherever it is located. As the planning charge is optional, this provides developers with the opportunity to opt for negotiations with the local authority on brownfield and other sites where the developer feels there should be a reduced charge.

4.10 Some may see a differential tariff as a way of encouraging more development on brownfield sites instead of on greenfields. However, the tariff should properly be regarded as a charge for the costs of public infrastructure and services, rather than as a tool to steer the location of new development. The latter is the role of planning policies and decisions on whether the proposed development should be permitted on the site. Moreover, there is a danger that using the tariff in this way could lead to town cramming. Its legality might also be questionable.

Windfall Sites

4.11 The consultation document suggests restricting the planning charge to sites identified in local plans. A windfall site will still have an impact on the local area and place similar demands on infrastructure and services. Windfall sites should be treated no differently, in this respect, to sites identified in Plans.

Technical Comments

4.12 The consultation was only received shortly before the finalisation of this report and detailed officer comments will be added to the key points outlined above to form the definitive response.

8452/DH