On the fast track – reducing hurdles to the agreement of section 106 obligations

This article was produced by Nabarro LLP, which joined CMS on 1 May 2017.

Summary and implications

Late last month, the Department for Communities and Local Government (DCLG) released a consultation paper seeking feedback on measures to speed up negotiations associated with agreements made pursuant to section 106 of the Town and Country Planning Act 1990. The paper follows on from the 2014 Autumn Statement in which the Government announced its commitment to delivering a faster and more effective planning system. The consultation paper is available here.

The consultation paper seeks feedback on proposals relating to:

• speeding up the negotiation and completion of section 106 planning obligations; and
• whether the requirement to provide affordable housing contributions acts as a barrier to development providing dedicated student accommodation.

In relation to the first bullet point, the paper acknowledges that protracted section 106 negotiations can cause significant delays to the planning application process. It proposes the implementation of a dispute resolution mechanism where statutory or agreed timeframes have elapsed. The form of this dispute resolution mechanism, according to the paper, could include:

• the submission of a draft section 106 agreement or unilateral undertaking during the course of negotiations could be a requirement before being able to refer to “external” dispute resolution; and
• access to “external” mediation if parties cannot agree on the scope of section 106 agreement within set timeframes.

An automatic or “deemed” solution was also proposed whereby any draft section 106 agreement or unilateral undertaking submitted by a proposed developer with a planning application became the deemed planning obligation after statutory or agreed timescales were breached (this was identified as being unworkable in practice).

Feedback was additionally sought on how a resolution process would be funded and whether it should be restricted to certain types of planning application.

In terms of affordable housing contributions and student accommodation, the paper outlined concern that despite student accommodation counting towards local authorities’ local housing requirements, some local authorities are seeking section 106 affordable housing contributions for proposals for dedicated student accommodation. The Government is concerned that these contributions are deterring dedicated student accommodation development.

While the consultation paper demonstrates the Government’s commitment to reducing delays in finalising section 106 agreements, legislative reform is only being discussed and any meaningful development in the area seems a way off. Furthermore, any proposed legislative changes will have to be acceptable and implementable for all types of development, and take into account whether local authorities can realistically comply with any future requirements having regard to inherent under-resourcing.

Responses to the consultation paper will inform future proposals to speed up section 106 negotiations which may lead to and require primary legislative reform in the next Parliament.

Further consultation on legislative changes in relation to student accommodation and affordable housing contributions will occur should feedback warrant it.

A summary of responses to the consultation paper will be published following the expiry of the consultation period on 19 March 2015.