S106 -2 day viability course- York

Gilian MacinnesDate: June 2015 www.pas.gov.uk

It is all about delivery

• Growth• Viability – including developer/landowner motivation

• Mitigation - Infrastructure

• Community expectations• Policy requirements – e.g. affordable housing

Money money money

There is only so much - how much?

• What will bring development forward?

• You need to have information on viability

• You have choices

Viability is a toolViability is a material consideration

S106- Planning Obligationshttp://www.pas.gov.uk/s106

www.pas.gov.uk

s106 obligations can:

• restrict the development or use of the land in any specified way

• require specified operations or activities to be carried out in, on, under or over the land

• require the land to be used in any specified way; or

• require a sum or sums to be paid to the authority on a specified date or dates or periodically.

S106 can:

• be subject to conditions, • specify restrictions definitely or indefinitely, • And in terms of payments the timing of these can be

specified in the obligation.

If the s106 is not complied with, it is enforceable against the person that entered into the obligation and any subsequent owner.

The s106 can be enforced by injunction.

S106 Obligations

• S106 is not replaced by CIL but…

• Viability - reality – pre 2008 and post 2008

• Legislation -pre and post 2010 CIL regulations and now post April 2015

S106 - tests

• If the development is capable of being charged CIL, the S106 obligation must meet these legal tests:

• NECESSARY to make the development acceptable in planning terms

• DIRECTLY RELATED to the development • FAIRLY AND REASONABLY related in kind and scale to

the development

• These are also now the policy tests in the NPPF

S106 obligations

• Site specific mitigation measures

• April 2015/CIL adoption onwards up to 5 obligations where infrastructure not funded by CIL – restricted pooling

• NPPF- planning obligations should take into account changes in market conditions over time and, where appropriate, be flexible to prevent stalling (para. 205)

PPG: planning obligations• LPAs will need to understand the

impact of planning obligations and should be flexible…Affordable housing contributions are often the largest single item sought on housing developments. These contributions should not be sought without regard to individual scheme viability.

PPG – Planning Obligations

• Assessing viability should lead to an understanding of the scale of planning obligations…where safeguards are necessary to make a particular development acceptable, and these safeguards cannot be secured, planning permission should not be granted.

Necessary to make acceptable in planning terms:

Persimmon Homes North Midlands v SSCLG [2011] EWHC 3931:

-High Court upheld the decision of an Inspector who dismissed an application for planning permission for 200 dwellings on the basis that it was not possible to determine whether the section 106 obligations complied with the CIL Regulations.

-“It seems to me that those requirements could properly be said to be directly attributable to, though not exclusively so, to amongst other factors the proposed development by this developer, and that some contribution to those requirements was therefore necessary to make the development acceptable in planning terms.”

Source: Andrew parkinson Landmark chambers

Land north of Littleworth Road, Benson Appeal Ref: APP/Q3115/A/14/2222595

• 53... Some of the provisions of the agreement would clearly be pooled but there is no information to indicate how many of these would be pooled with more than five contributors. I have therefore taken into account in my decision only those elements of the agreement (the affordable housing, the open space and the highways works) which would clearly not benefit from pooled contributions. This does not however invalidate the signed agreement.

Renegotiation of s 106BA

• Changes in the Growth and Infrastructure Act that require a council to renegotiate previously agreed affordable housing levels

• viability of affordable housing requirements only

• not reopen any other planning policy considerations or review the merits of the scheme

Appeals

• Under section 106 BC- Appeal on affordable housing viability – revised level of Affordable housing for 3 years

S106 BC - Appeals

• Burden is on the developer to show the scheme is not viable

• Starting point is the assumptions used during the original assessment

S106 BC – Appeal examples

• Appeal Ref: APP/X2410/Q/14/2225175 Land off Iveshead Road, Shepshed LE12 9ER- AH reduced (30% to 17%)

• Appeal Ref: APP/P1615/Q/14/2215840 Land between Lydney Bypass and Highfield Road (known as Lydney A and Lydney B), Lydney, Gloucestershire- AH reduced(20% to 14%)

• Wychavon reduced from 40% to 30%

S106 - Recent changes

Ministerial statement in November 2014 introduced changes to

-Size of development for which you seek affordable housing contribution

-Size of development for which you can seek a financial contribution (tariff)

-Treatment of vacant buildings

Change March 2015 - Starter homes

Affordable housing threshold

• 10-units or less, and which have a maximum combined gross floor space of 1,000 square metres, affordable housing and tariff style contributions should not be sought (also applies to all residential annexes and extensions)

Rural designations

• In designated rural areas authorities may choose to implement a lower threshold of 5-units or less, beneath which affordable housing and tariff style contributions should not be sought.

• If the 5-unit threshold is implemented, payment between 6-10 units should be sought as a cash payment only and be commuted until after completion of units within the development.

No change:

• Not applicable to rural exception sites

• Affordable housing and tariff style contributions should not be sought in relation to residential annexes and extensions.

Vacant buildings credit

• A credit, equivalent to the existing gross floor space of any vacant buildings brought back into any lawful use or demolished for re-development, should be deducted from the calculation of any affordable housing contributions sought.

• Does not apply to vacant buildings which have been abandoned.

• http://www.pas.gov.uk/web/pas1/s106/-/journal_content/56/332612/6783401/ARTICLE

S106 viability and review mechanisms• Quantum based on development plan• Other material consideration• Careful wording and reassessment criteria • ATLAS examples

Local Planning Authorities should take account of changes in market conditions over time and wherever appropriate be sufficiently flexible to prevent planned development from being stalled (para 205).

FOI /EIR and the Courts

• Elephant and Castle – Heygate

• Royal Borough of Greenwich v Information Commissioner

• Courts – supporting confidentiality

Heygate – partial disclosure

Greenwich – Public interest for disclosure

R (English) v East Staffordshire Borough Council & Anor [2010] EWHC 2744

• The High Court refused permission for judicial review. The court highlighted that:

• The local authority has a duty to ensure sufficient information is made available to enable an intelligent response from the planning committee; but• It was sufficient to disclose the “gist” of the information as the report had been independently verified.

Monitoring Fees

Oxfordshire County Council v SSCLG [2015] EWHC 186

-Argued that Inspector erred in finding that a monitoring fee was not necessary for the purpose of reg. 122, and that monitoring fees will always be necessary where there is a planning obligation to be monitored.

-HELD: “This was a routine planning application for a relatively small development in which the Claimant was seeking a fee based on its standardised table of fees rather than any individualised assessment of special costs liable to be incurred for this particular development. The only allowable contributions (education and library services) did not require ongoing management or maintenance; they were single payments...In these circumstances, I consider that the Inspector was entitled to conclude that [the contribution] was not “necessary”.Source: Andrew Parkinson – Landmark chambers

Speeding up s 106

• Autumn Budget statement

• Consultation -Section 106 Planning Obligations – speeding up negotiations

• March 2015 changes to PPG- Extensive additional advice to improve implementation of s106 and add clarity

Questions?