Changes to planning obligations - how Section 106 Obligations will fit in with PGS

This is the third and final Law-Now of the short series which focuses upon the Government’s three consultation papers that were published in mid-December on the refinements to the proposed Planning Gain Supplement and its relationship with Planning Obligations.

The purpose of the Department for Communities and Local Government paper ‘Changes to Planning Obligations: a Planning-gain Supplement consultation’ is to set out more detailed views on the range of items that should be contributed by developers through section 106 obligations if PGS was introduced. The Government’s rationale for scaling back planning obligations under section 106 of the Town & Country Planning Act 1990 is to

(a) Reduce negotiation costs for developers and provide greater certainty as to the amount of developer contributions that will be required in s.106 obligations.

(b) Ensure that planning obligations run smoothly alongside PGS to avoid contributions under the two systems being required and then used for similar purposes – examples given in the consultation paper include the funding of education facilities and health service infrastructure (commonly referred to as social infrastructure).

The consultation paper sets out the Government’s proposals on the future scope of planning obligations including:

(i) A “development site environment” approach – if the need for a particular item of planning gain is related directly to the viability of the physical environment of the development site, or the need for a proportion of housing to be affordable on that site, then it should continue to be the subject of a planning obligation. If on the other hand the requirement relates to the site’s social infrastructure then it would no longer be within the scope of a section 106 obligation.

(ii) In-kind contributions of land for public and community facilities on large sites – based on (i) above, contributions towards community and social facilities associated with new development would not be included within the scope of planning obligations. However, Government believes that it still needs to decide on the mechanism for the provision of the land on which facilities would be located. It identifies a number of practicalities that need to be considered. For example, including provision of the land within the scope of planning obligations would ensure the facilities are integrated fully within development proposals but this may result in more protracted negotiations which in turn would slow down the delivery of new development.

(iii) Affordable housing - Government proposes to introduce a common starting point in the negotiations of developers’ contributions to affordable housing. This would be implemented through Local Development Frameworks. It is seeking the views of stakeholders on the best common starting point as well as the value of such a contribution. How do you reach agreement between the different parties on the value of the land in question? What if a site is heavily contaminated? Would it be necessary for the parties to have been in negotiation to agree a reduced contribution by the developer in order to allow the costs of remediation to be met?

(iv) The use of planning obligations and highways agreements for managing the transport impacts of new development – Government is seeking responses from stakeholders as to which aspects of transport provision might best be included within planning obligations or highways agreements, and which aspects might better be dealt with directly by the public sector using PGS and other sources of revenue.

(v) The use of planning obligations versus planning conditions – Government considers that it should reinforce the current policy presumption that planning obligations should only be used where it is not possible to use a planning condition.

The consultation period runs until 28 February 2007 so there is time to consider the detail of the consultation papers.