Worried/Bamboozled/Angry about Developer Contributions?
You are not alone! Councils require financial and other contributions from developers as part of the planning permission for many types of development and this is usually on top of any highway or drainage works that may be required. Usually the person paying for the contributions is not the developer but the land owner or the end user.
Developer contributions come in two forms- Section 106 Agreements – these are legal agreements between the Council and the landowners/developers and sometimes other interests involved requiring works to be carried out, land to be set aside for a specific purpose and/or money to be paid as part of a grant of planning consent for development.-
Community Infrastructure Levy (CIL) – various Councils have a scheme of charging for specified types of development that has been through public consultation and scrutiny by a Planning Inspector. Not all Councils have been through the public consultation/scrutiny process for CIL and the Levy has only been in existence for around 3 years. If you have a development covered by a CIL, the proposal will be subject to the Levy at the published rate.
Various national bodies and developer groups are coming together to lobby the Government to abandon the whole CIL procedure on the basis that it is not fulfilling its original aims and could be a break on development. Section 106 Agreements have been around for many decades and are for covering matters that cannot be dealt with by way of a planning condition attached to a planning permission. Many Councils seek to obtain financial contributions for other Council services e.g. Schools, open space from developers. However, to meet legal tests the contributions sought have to be fair, reasonable and related to the development concerned. For example, for a major housing scheme where local schools are at capacity, it would be “appropriate” for a contribution to additional classrooms to be made but this would not be the case for a scheme for housing for the elderly. There have been problems with Section 106 Agreements and these can be classified as follows-
Uncertainty. It is not necessarily clear at the outset of drawing up plans for a development whether a Section 106 Agreement would be necessary or the full extent of such an Agreement. – Protracted Discussions. Some discussions go on for months and in some instances years.
Scrutiny. Whilst it is public knowledge that discussions are taking place on such agreements, the exact negotiations are confidential between the principal parties. There have been calls for more transparency regarding the process of arriving at Section 106 Agreements The Government is considering an overhaul of aspects of the Section 106 Agreement procedure and is consulting on measures to speed up the process and resolve conflicts that rise.
The proposals for consultation are summarised as follows;-a) Setting clear time limits for the negotiations of Section 106Agreements that are linked with the time periods for the associated planning application (usually 8 or 13 weeks) b) Requiring the parties to the Agreement to start the discussions at the beginning of the planning application process and not at an intermediate point or at the end of the process c) Setting up a dispute resolution process d) Standardising documentation. These measures would require legislation in the next Parliament.
CMM would welcome any comments on these matters from clients. Clearly, with a general election in May, the consultation proposals may not lead to any changes and a new Government will have its own priorities and legislative programme. However, it would be of assistance for the appropriate planning minister to be aware of the concerns of the developers/landowners.
CMM provides support for clients who may be affected by Section 106 Agreements.
CMM Planning Consultant