Long Read – A Guide to Section 106

Image: www.insidehousing.co.uk

This article has been written by resident Bob Mullen, who has kindly permitted the Parish Council to publish it on our website.

Housing Developers planning obligations – section 106
What are planning obligations?
Planning obligations, also known as Section 106 agreements (based on a section of The 1990 Town & Country Planning Act) are private legal agreements made between Local Authorities and housing developers and can be attached to a planning permission to make acceptable a harmful development which would otherwise be refused in planning.
The primary requirement for a developer’s obligation is to improve the facilities and infrastructure of the impacted community affected by the development.
Not all obligations provide money, occasionally the developer may instead offer work in kind such as providing a new footpath or bridleway, building a community centre or building affordable housing onsite or offsite elsewhere in the Borough. Often they only offer money to the Local Authority being so much easier for them.

The most common planning obligations require contributions to:
• community and leisure facilities
• affordable housing
• education
• transport and travel
• open space and the environment
• health facilities
• employment

These are called heads of term. The payments themselves are usually tied to trigger points related to the number of houses as they are built and most importantly occupied (when attracting Council Tax).
Although a section 106 legal agreement is made between the developer and the Local Authority the impacted community also has a part to play in deciding what money goes where. This is achieved by the community becoming quickly aware of a new large scale housing development (usually 10 or more houses) either through rumour, a developer’s early press release, a developer’s pre-application local exhibition, or in the worst case when a planning application is eventually submitted to the Local Authority.

There is an established protocol in commencing community involvement. Ward Councillors are the residents direct route into the Local Authority, therefore it should be their responsibility to organise a local consulting group, usually called a ‘section 106 Steering Committee’ comprised of interested residents, Parish Councillors and Community Councillors who would take the first steps in looking into the impact of the development on their community. They should establish in which of those areas mentioned above (the heads of terms) where they would wish the money to be allocated in their community.

The Steering Committee should take their ideas to a public meeting for further discussion and debate. The Ward Councillors would then take those publicly agreed findings to the planning officers and ensure they are recorded as the community’s wishes, to be borne in mind when the Local Authority eventually enters into discussions with the developer on the s106 obligations.
The planners will establish the amount the developer should contribute based on either standard formulae or a standard tariff.

An example is the s106 agreement for the September 2012 Grey Towers Village development:
• Affordable Housing – £4,500,000, various trigger points for partial amounts during construction, 150, 120, 170, 220, 270 houses built.
• Highways – £3,600,000, same trigger points as above
• Community facilities – £200,000, to be paid on commencement of development
• Education – £750,000, two trigger points for partial amounts during construction, 150 and 200 houses built.
• Sports and Recreation – £100,000, to be paid on commencement of development.

N.B. There have since been a number of legal variations made on the above, sadly to the apparent detriment of Nunthorpe.

There are a number of drawbacks that may prevent the impacted community achieving a fair share of the s106 money. The first is local apathy and lack of interest in wanting to become involved, the second is the Ward Councillors may not pick up the baton on behalf of their community early enough and thirdly, the Local Authority totally ignore the wishes of the community.

Often the result of these failures is that the impacted community requirements are put to the bottom of the list when the money is eventually diverted to elsewhere in the Borough. The Local Authority would then secure all the received s106 moneys into a pool fund and then occasionally spread it around on other areas in the Borough. It is unfortunate the s106 procedure appears to be flawed and is easily abused.

It is interesting to note a recent article in the Gazette stated more than two thirds of section 106 money received by Middlesbrough Council in the past five years has not been spent yet. The Council received £9,964,332 in that time and £7,113,023 is still waiting to be used.

Bob Mullen
01 May 2019